Consumer complaints about loan origination have increased dramatically in the first 18 months of the COVID-19 pandemic, according to a Consumer Financial Protection Bureau(CFPB) released last week.

The bureau’s research note, which analyzed the relationship between U.S. Census characteristics and the share of consumers complaining about each stage of the credit life cycle, found that between February 2020 and July 2021, there had been a “sharp increase in the volume of consumers with credit reports and loan origination complaints.”

Specifically, the bureau said loan origination complaints, mostly driven by mortgage complaints, were 50% higher in 2020 than in early 2018. Complaints came mainly from predominantly white communities with relatively income. high, the report notes.

“Much of this volume appears to be related to the refinancing of existing mortgages as consumers attempt to take advantage of historically low interest rates,” the office added.

The report found that the number of consumers filing credit complaints continued to increase in 2020 from already high levels in 2019.

“Due to its unique role in the credit life cycle, downstream of past loans and upstream of new loans, the increase in the number of consumers with credit complaints may also be related to attempts by consumers to improve their credit scores when seeking new credit, especially given current mortgage interest rates, ”the report says.

However, the number of consumers with failed service complaints declined from 2018 levels and remained low throughout 2020. The CFPB links this to the effectiveness of the Coronavirus Aid, Relief and Economic Security Act (CARES), which went into effect in March 2020 and relieved struggling homeowners with federally guaranteed mortgages.

Data compiled from 2018 to 2020 by the CFPB shows that there is a demographic link with the types of complaints that are submitted to the office.

For example, the CFPB found that consumers in lower-income communities and higher shares of black and Hispanic borrowers submit more complaints about past financial issues and identity theft victimization. And richer, predominantly white communities are filing complaints about current issues they face with lenders and service providers, the CFPB said.

The CFPB said these observations indicate “structural differences in access to credit” and that this is exemplified by white borrowers “complaining of loan arrangements at more than twice the rate of black consumers … with differences in mortgage credit complaints playing a disproportionate role. “

The CFPB concluded that these differences “serve as a further reminder of the sharpness of the racial divide in the United States and its relationship to access to credit, particularly housing finance.”

“Past barriers limiting access to regular credit for racial minorities, the long-term impact of the 2008 mortgage crisis and continued inequality of access continue to determine the types of opportunities consumers have – And these contexts shape consumer interactions with the CFPB, ”the report added.

The bureau noted that a pattern that is “of particular concern” is the growing wealth gap between communities and that “this growing gap suggests that new credit, particularly mortgages and mortgage refinances, may be disproportionately available. for consumers in communities with a higher AMI and a greater share of non-Hispanic white residents.