{ "id": "R46356", "type": "CRS Report", "typeId": "R", "number": "R46356", "active": true, "source": "CRSReports.Congress.gov, EveryCRSReport.com", "versions": [ { "source_dir": "crsreports.congress.gov", "title": "COVID-19: Consumer Loan Forbearance and Other Relief Options", "retrieved": "2020-11-17T04:03:20.884968", "id": "R46356_6_2020-10-23", "formats": [ { "filename": "files/2020-10-23_R46356_46d446da3579027096e6a7c0a4b5597ba5b89c95.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/R/R46356/6", "sha1": "46d446da3579027096e6a7c0a4b5597ba5b89c95" }, { "format": "HTML", "filename": "files/2020-10-23_R46356_46d446da3579027096e6a7c0a4b5597ba5b89c95.html" } ], "date": "2020-10-23", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "R", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R46356", "type": "CRS Report" }, { "source_dir": "crsreports.congress.gov", "title": "COVID-19: Consumer Loan Forbearance and Other Relief Options", "retrieved": "2020-11-17T04:03:20.883714", "id": "R46356_4_2020-06-02", "formats": [ { "filename": "files/2020-06-02_R46356_c0b8ca15ef4ec268f76d199d93a4fe7802354647.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/R/R46356/4", "sha1": "c0b8ca15ef4ec268f76d199d93a4fe7802354647" }, { "format": "HTML", "filename": "files/2020-06-02_R46356_c0b8ca15ef4ec268f76d199d93a4fe7802354647.html" } ], "date": "2020-06-02", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "R", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R46356", "type": "CRS Report" }, { "source": "EveryCRSReport.com", "id": 625161, "date": "2020-05-14", "retrieved": "2020-05-20T22:19:00.357502", "title": "COVID 19: Consumer Loan Forbearance and Other Relief Options ", "summary": "A growing number of reported Coronavirus Disease 2019 (COVID-19) cases have been identified in the United States, significantly impacting many communities. This situation is evolving rapidly, and the economic impact has been large due to illnesses, quarantines, social distancing, local stay-at-home orders, and other business disruptions. Consequently, many Americans will lose income and face financial hardship due to the COVID-19 pandemic. \nMany consumers may have trouble paying their loan obligations, such as mortgages, student loans, auto loans, and credit cards. Due to increasing hardship, loan forbearance has become a common form of consumer relief during the COVID-19 pandemic. Loan forbearance plans are agreements that allow borrowers to reduce or suspend payments for a short period of time, providing extended time for consumers to become current on their payments and repay the amounts owed. These plans do not forgive unpaid loan payments and tend to be appropriate for borrowers experiencing temporary hardship. Loan forbearance may become a less viable option to deal with the financial ramifications of COVID-19 if the pandemic causes prolonged disruptions, such as persistent elevated levels of unemployment or permanent business closures.\nA consumer\u2019s ability to get a forbearance and under what terms may be significantly influenced by what type of institution owns the loan. These various institutions\u2014including banks and credit unions, private nonbank financial institutions, government-sponsored enterprises (GSEs), and the federal government\u2014are subject to different laws, regulations, and business considerations.\nIn response to the COVID-19 pandemic, the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136) on March 27, 2020. The act establishes consumer rights to be granted forbearance for federally insured mortgages (Section 4022) and federal student loans (Section 3513). The law also protects the credit histories of consumers with forbearance agreements (Section 4021). \nThe CARES Act establishes consumer rights to be granted forbearance for many types of mortgages and federal student loans, but the act does not grant consumers these rights for other types of consumer loan obligations, such as auto loans, credit cards, private student loans, and bank-owned mortgages. In these cases, financial institutions have discretion about when and how to offer loan forbearance or other relief options to consumers. Therefore, a consumer\u2019s ability to access these options may vary.\nIn addition to legislative responses, financial regulatory agencies have responded to the COVID-19 pandemic using existing authorities to encourage loan forbearance and other financial relief options for impacted consumers. Many financial regulatory agencies have updated their guidance to help financial firms support consumer needs during this time. Regulatory guidance does not force financial institutions to take any particular action for consumers (such as offering loan forbearance), but it can encourage them to offer various forms of support. In recent weeks, many banks and credit unions have announced measures to offer various forms of assistance to affected consumers.\nThe economic effects of the COVID-19 pandemic impact the financial system in important ways. Large numbers of missed consumer loan payments can have significant negative consequences for financial institutions. Because of the potential strain on the financial system, it might be challenging for institutions to provide consumer relief, and financial relief efforts may be insufficient to provide widespread assistance to impacted consumers without direct government intervention. \nMany consumers having trouble paying their loans may not realize that the CARES Act gives consumers a right to be granted loan forbearance in certain circumstances, and that their financial institutions can provide loan forbearance, access to credit, or other assistance. If consumers are not aware of these existing relief options, it is possible that relief might not reach the most in need. In addition, increasing fraud schemes relating to COVID-19 seem to be occurring, which can drive consumer confusion. Both government agencies and financial institutions can play an important role in communicating with financially impacted consumers.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/R46356", "sha1": "fb496dc66f8d0cdb0d280bb5ac433a00ab5e64c8", "filename": "files/20200514_R46356_fb496dc66f8d0cdb0d280bb5ac433a00ab5e64c8.html", "images": { "/products/Getimages/?directory=R/html/R46356_files&id=/1.png": "files/20200514_R46356_images_b7165ab74acb62255765bd0a35d79a06b9f7aff7.png", "/products/Getimages/?directory=R/html/R46356_files&id=/0.png": "files/20200514_R46356_images_14805c589fc3b2b8db1214e8d61cb37b2f60c1d8.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/R46356", "sha1": "9844d1c20bd87813a867cab0b0542bb9e29dfa9d", "filename": "files/20200514_R46356_9844d1c20bd87813a867cab0b0542bb9e29dfa9d.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4775, "name": "Consumer Finance Protection" }, { "source": "IBCList", "id": 4776, "name": "Housing Finance" }, { "source": "IBCList", "id": 4898, "name": "Financial Market Regulation" } ] } ], "topics": [ "Economic Policy" ] }