from the New York Fed
The October 2020 survey shows most credit application and acceptance rates falling sharply with the onset of the coronavirus pandemic.
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The latest Credit Access Survey reveals the stark imprint of the pandemic on consumer credit markets, with most credit application and acceptance rates falling sharply after February 2020. Application and acceptance rates for credit card and credit limit increase requests showed the largest declines, followed by auto loans. Meanwhile, application and acceptance rates for mortgage refinances continued to surge through 2020, with primarily high credit score borrowers taking advantage of lower mortgage rates. Looking ahead, households generally lowered their expectations during 2020 regarding applying and receiving credit over the coming year. The average probability of being able to come up with $2,000 for an unexpected need also reached a new series low in October 2020.
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The COVID-19 pandemic s financial impact on key
sectors of the economy has triggered some tightening of business
and consumer lending requirements, and banks have been imposing
more stringent standards for borrowers, especially
consumers.
This change is borne out by the Fed s July 2020 Senior Loan
Officer Opinion Survey on Bank Lending Practices. In addition,
leading banks continue to increase reserve rates on consumer loan
portfolios in anticipation of higher delinquencies to come.
While many traditional lenders have pulled back from consumer
lending due to new uncertainties in their risk model and funding