Credit unions are facing new challenges during COVID-19. Many of their members are facing new financial circumstances, and those members are asking new questions. Credit unions are working hard to provide answers.
As with all growing pains, not everyone is enjoying the process.
In May, the Consumer Financial Protection Bureau (CFPB) ran a report of coronavirus related complaints. Here are the results.
Record Months at the CFPB
As of April 30, 2020, there were over 4,500 complaints issued to the CFPB for specifically COVID-19 related issues.
In running the report, the CFPB looked for the following key words:
- COVID
- Coronavirus
- Pandemic
- CARES act
March and April were record months for overall complaint volume, too. Over 36,000 complaints were received in March and more than 42,000 in April!
The Top Figures
Credit reporting has held its number 1 position for complaint volume through the year so far. Those issues constitute 52% of complaints since January.
The highest volume of COVID-19 complaints were mortgage and credit card related.
In 2019, mortgage related complaints were just 8% of complaint volume. Credit card complaints made up 9%. Those numbers grew dramatically over the course of the pandemic.
In fact, mortgage related complaints almost tripled to 22% of total complaint volume. Credit card complaints nearly doubled to 19%. 59% of those consumers identified COVID as the reason they were struggling to pay their bill.
The CFPB also reports a high volume of people struggling to pay on car, personal, and title loans.
These increased stats paint a clear picture:
More people are struggling to pay their bills in the first quarter of 2020 than in all of 2019.
Other Problems
The CFPB’s report highlights a few of the top COVID-19 related issues they found.
1. Terms and Conditions
What consumers requested the most was changes to loan terms. Inquiries were about interest rates, extending the length of the loans, and postponing payments. For those issues, “CARES Act” was the most used keyword.
These requests were in highest volume for:
- Mortgages
- Credit cards
- Vehicle loans/leases
- Student loans
- Personal loans.
2. Unemployment Funds
We’ve seen a trend across America. Unemployment rates are at their highest since the great depression, which has caused problems for both disbursement and access to funds.
Unemployment benefits can be disbursed by direct deposit or through a prepaid debit card. These methods haven’t been foolproof. Many would-be recipients were unable to withdraw or access funds, and lost cards were common.
Many consumers reported being unable to reach customer service across all servicers.
This pandemic has flooded financial institutions with questions and concerns.
Often, the only way to reach a customer service rep is by phone. When consumers aren’t greeted with a busy signal, they’re often on hold for hours at a time.
4. Forbearance
What do mortgages, credit card payments, and student loans have in common?
90-day forbearance periods. Many consumers reported it was not enough time. Some companies want a lump sum at the end of their forbearance period. Most wouldn’t be able to pay it.
Many people are seeking forbearance for the first time. It’s unfamiliar territory. There are a couple of common questions. First, whether forbearance would have a negative impact on their credit score. Second, whether it could limit their ability to secure future loans.
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4 key principles and 9 questions to jumpstart your audit planning. From leading credit unions.Final Thoughts
The Coronavirus pandemic is ongoing, as are changes to the regulatory landscape. COVID-19 related complaints to the CFPB are increasing, along with the challenges credit unions face.
Credit unions have been strongly encouraged to work with their members. They have an opportunity to ease the financial burdens many Americans are facing. Compliance with new regulations can be taxing—especially when also accommodating pandemic-related changes to normal operations.
With all of the new tasks on your plate, the last thing your business leaders need is to spend more time on audits. It’s one way you can spend less time on numbers and more time on people.
Book your demo to see Redboard’s automated audit management software for credit unions.
