Transcript CFPB FinEx Webinar: Making Ends Meet: The early impact of the COVID-19 pandemic on consumer finances September 2021 Presenters: Scott Fulford, Office of Research, CFPB; Eric Wilson, Office of Research, CFPB, and Marie Rush, Office of Research, CFPB Facilitator: Heather Brown, Ed.D., CFPB Financial Education Exchange (FinEx) Program Lead >>Ms. Susan Funk: Good afternoon. My name is Susan, and I'm from the CFPB Events Management Team, and I want to go over some logistics before we begin today's presentation. If you are having any issues with your audio, please click on the audio button near the bottom middle of your screen. There, you have the option of having a WebEx platform dial your phone number, and you can receive audio that way. For closed captioning, we have the closed captioning link available in the chat box, which is located in the bottom right-hand corner of your screen. During the event, if you have any technical issues, please use the chat box and select host, and send me a message. The presenters will be answering questions at the end of the presentation, but feel free to use the chat box to put your questions in, and they will answer the questions at the end of the presentation. And now I'm going to turn the even over to Heather Brown. >>Dr. Heather Brown: Thank you, Susan. Welcome, everybody. My name is Heather Brown, and I am the CFPB FinEx program lead, and I'm going to be your host for this webinar today. I'm going to just turn the video on briefly while I talk to you quickly and make some quick introductions, but I'm going to turn it off shortly to save bandwidth. The webinar today is entitled "Making Ends Meet: The early impact of the COVID-19 pandemic on consumer finances," and we will be providing slides to everyone that registered and provided their email when they signed in to register. If you did not provide your email when you signed in to register, I just put up the email address that you can request a copy of the slides in. For those that did side in to register, you should have your slides before close of business today. Let's see. I also wanted to let you know that we are going to accept questions in the chat, as you were instructed by Susan, and also, if, for some reason, you don't get your question in or it's a question you don't feel comfortable asking to the group, you can also feel free to email that question to the CFPB FinEx box that's in the chat. And I will get back to you with an answer or reach out to the team to find someone that can answer your question for you. Okay. I am going to read through some preliminary—go through some slides, our disclaimer, and introduce you to the FinEx program for those of you who are new and this is your first time, and then I will introduce our speakers, and then we will get started with the presentation of the day in just about 5 minutes. Our disclaimer, this presentation is being made by Consumer Financial Protection Bureau representatives on behalf of the Bureau. That includes everyone that is presenting today. It does not constitute legal interpretation, guidance, or advice of the Consumer Financial Protection Bureau. Any opinions or views stated by the presenters are our own and may not represent the Bureau's views. The inclusion of links or references to third-party sites does not necessarily reflect the Bureau's endorsement of the third party, the views expressed on the third-party site or the products or services offered on the third-party site. The Bureau has not vetted these third parties, their content, or any products or services they may offer. There may be other possible entities or resources that are not listed that may also serve your needs. The mission of the Consumer Financial Protection Bureau, as many of you know, is that it's a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. And the CFPB FinEx program is within our Financial Education office, and our mission is to promote all of our great resources and tools to our audiences, both consumers and practitioners such as yourself. This is a little background on me, which you can read through when you get the deck. I wanted to let you know about the CFPB FinEx program. We basically will provide updates on research tools and webinars via email when you sign up. Many of you know that. If you did not get this email announcement for this webinar directly in your box, then you are not on our list. If you did, you are, and you don't have to worry about signing up again. For those that want to sign up again, the address is in the box, that you can send an email too saying that you want to join the list. You can also click the link in the bottom of this slide when you receive it to actually go directly to our online sign-up. We have a network of over 30,000 financial practitioners, coaches, counselors, housing counselors, credit counselors, and we have also 3,500 practitioners on our LinkedIn discussion group. At the end of this, my little introduction, you will see a link to that as well if you want to join. And so we offer anywhere from 10 to 20 webinars a year. We also will opt in on webinars that are offered by other offices that are relevant to financial practitioners, and when we are not in pandemic mode, we will host regional meetings and conferences. We can also help you out if you need to get to know CFPB subject-matter experts that can present or work with your organization in some way. Please just reach out to me in the FinEx box. Many of you have already benefited from and shared this with—this particular website with your team, but I just wanted to remind everybody that our coronavirus page is still up and being updated regularly, and the team that handles that is doing a fantastic job of staying on top of things. When I get questions, both from the job and from friends about things that they are experiencing and need help with, it's my first stop too around pandemic, and it has links to HUD's housing pages and lots of other useful information that is regularly updated. Online resources for practitioners, for all of you, of course, the FinEx is focused on practitioners, and so they recently updated the webpage. And if you all hadn't visited it in maybe the last couple months, you may have missed that. But you can go to this page and get links to all the resources that will be useful for you and your practices when you are educating adults. And we also have a K-12 program. I know we have some teachers on the call as well. Regarding financial education resources for adults, we have financial well-being scale, and there is a link on this page to that scale and an entire toolkit to talk about how to use it, along with research that goes with it. We have had lots of different groups doing research on their audiences and their financial well-being scores, and I think you will find that beneficial, especially if you are using the tool as an intake device or for some other purposes. And some other research that's out there for adults, five principles of financial education, we have some great money motivation tools like the Money Circle toolkit, and then all of the past webinar training is also here. If you click on the link that you see at the very bottom, under webinar training, you can see our archive of past webinars that go back to 2015. And they are now up-to-date, and thank you to my colleagues, Laura and Miesha, a shout-out for helping me get that caught up—and Ken as well. So all of these tools are there for your using and things that will be useful to adults that you work with when you are providing education. And this is just another screenshot of the page to kind of show you have to scroll down when you hit that page for webinars. You will see an announcement for the current webinar, and then when you scroll down to the bottom, this is the last workshop that we did in August on housing insecurity. And there's transcripts and slides and the full recording for most of the webinars, but at a minimum, the recording is there and the deck. Okay. So that takes us to our presentation of the day. I'm very excited. I'm going to turn my camera off now, so I can also review my notes on the background for our speakers as well as get ready for you to see them. Our speakers today are Scott Fulford. Scott is a senior economist in the Office of Research. At the Bureau, he leads the development of the Making Ends Meet surveys, which you are going to learn about today. His research focuses on how consumers manage shocks using credit and savings. Before coming to the Bureau, he taught development economics and international studies at Boston College. We welcome Scott and are excited to hear from him. I'd also like to welcome Marie. Marie Rush is a research analyst in the Office of Research. She focuses also on the Making Ends Meet survey. You'll hear what a comprehensive survey it is shortly. She has co-authored previous reports using the Making Ends Meet data in addition to this report. She has been at the Bureau for just over 2 years. Thank you for joining us today, Marie. And last but certainly not least, we have Eric Wilson. Eric is a research analyst in the Office of Research, and he serves as a program manager for surveys like the one we will be discussing today. He recently celebrated his one-year anniversary as a CFPB employee. Welcome and congratulations on that. Before joining the Bureau, Eric worked at the Financial Health Network, where he co-authored the U.S. Financial Health Pulse, an annual study of consumers designed to measure financial health in America, using both survey and transactional account data. So I welcome all three of my esteemed colleagues, and thank you so much for taking time from your busy research schedules to present to the FinEx audience. I always think it's exciting to hear the presentations straight from the researcher because it gives us the opportunity to ask them questions, and they have insights which help out a lot as well. With that, I'm going to turn this over to Scott, and he's going to begin his presentation. Thank you. >>Mr. Scott Fulford: Thank you so much, Heather, and thank you, all of you, for joining us. As Heather mentioned, all of us sit in the Office of Research in the Consumer Financial Protection Bureau, and the Office of Research, its primary goal is to get really fundamental research on how consumers are doing. And what we really like to think is that it's really exciting for us to get to connect with people who are working directly with consumers, and so, hopefully, what we can give you is a little bit of a sense of how some of the things that you may be seeing are happening with consumers more broadly. So let me give you a little bit more of a background on we are going to be talking about today, and I'm going to step back one slide, just a little bit. So, first, I'll give you a little bit of an overview of the Making Ends Meet survey program, which is a survey that the Bureau has been conducting for several years, and it has finally really started to yield some really interesting results, particularly during the pandemic. And we'll talk about some of the changes in consumer's financial status that we've been seeing, particularly during the early months of the survey. So we will talk about consumer's financial well-being, and we'll talk about how that's measured. We'll talk about difficulty paying bills and expenses and credit scores and think about what types of consumers were having difficulties. We are also going to talk about the consumers whose financial status got worse and why and how, and finally, we will think a little bit about what's next for the surveys. >>Dr. Brown: Scott? >>Mr. Fulford: Oh, go ahead. >>Dr. Brown: This is Heather. I'm sorry. I just passed the ball to you. I apologize. Just so you know, you're caught up with the slides. Also, it sounds a little quiet to me. I don't know if you can get closer to the mic, mainly for the recording. I can hear you well enough, I think, for the presentation. >>Mr. Fulford: Okay. Thank you very much, and for all of you out there, doing these things online is always a little bit of an adjustment. So I'm sorry if it's quiet. I will try to speak louder. So, hopefully, we're all now on the "Making Ends Meet Survey: Background." Heather or Susan, please let me know if I'm in the wrong place. What these surveys are, are general financial surveys, but what we're trying to do is focus on what happens when consumers are facing financial problems. Our goal is to really get a general survey of all consumers but to have a reasonably large sample of consumers who are having difficulties, and our goal really is to understand what causes consumers to have difficulties, what difficult choices they make when they're having financial difficulties, with a goal of helping understand how we can help consumers deal with difficulties and hopefully help avoid them and, for example, what products in the financial market might be valuable to consumers when they are having difficulties. The survey is associated with the respondents' credit records. So what's really useful about that is it's going to sample from the Bureau's Consumer Credit Panel, which is a random and de-identified sample of credit records maintained by one of the three nationwide credit reporting agencies, and what this association is going to do is it's going to allow us to understand how consumers' credit and debts evolve before, during, and after the survey waves. You'll see in several cases where that can be really powerful because we're be able to understand some things about the context of decisions consumers are making and why they're making some of those decisions in ways that we wouldn't necessarily be able to do without that association. Very briefly, for those of you who find surveying really exciting, this association is really powerful in other ways as well. So it allows us to over-sample, to select consumers who are representative of consumers who might be having problems. So, for example, for this survey, we're more likely to send a survey to consumers who were having recent delinquencies or who have low credit scores. It also allows us to adjust for nonresponse. So not all consumers are going to respond when they get a survey, and because we understand what's happening both in the credit bureau debt data, both for consumers who responded to our survey and consumers who didn't, we can adjust in ways that many surveys can't. For example, consumers who have lower credit scores will less likely respond, and we can adjust for that. To it allows us to make the surveys more representative of consumers broadly but also consumers who are having difficulties. So let me tell you a little bit about what the surveying we've done. So our first large wave of the survey was in May 2019, and this is going to give us a baseline for the financial status of consumers before the pandemic. And we have about 3,000 responses to that survey. We're going to then draw on Wave 2, which was sent to all of the people who responded to Wave 1, to better understand a consumer's financial status during the initial stages of the pandemic, in approximately May 2020 and June 2020. And what's really useful about this is that the same people are going to respond both to Wave 1 and Wave 2. So we'll have a better sense about what the changes are occurring by individual consumers. And more recently, we conducted a third wave, in February 2021, which is really thinking about financial status after a year of the pandemic, and we were able to actually rethink what were the important COVID policy specific questions on that survey. So this webinar is going to focus really on the first two waves, but we're really excited to be able to talk about the most recent wave soon and think about how changes are occurring. So let me talk a little bit about what the key findings that we're going to talk about are. So the first—and this may be a surprise—it was certainly a surprise to us, but it's very strongly there—is that despite the volatile economic conditions, the average consumer's financial status actually improved between June 2019 and June 2020. And we'll show this across a wave of different ways of measuring it. So, for example, financial well-being increased as did credit scores, and difficulty paying bills and expenses decreased. And there are other sources of information that confirm that there seems to be something that was fairly widespread across a lot of measures of different ways of measuring consumer's financial status. These financial improvements were pretty widespread across race, ethnicity, age, rural status, and income level. It seems that most groups improved, but I want to make sure I'm tempering that. There were large preexisting differences across these groups, and we'll talk a little bit more about them. Our survey is—we don't have enough of a large enough sample to say whether those increased or decreased, but the large preexisting differences did persist during the pandemic. And, finally, of course, not everything is good news. Some consumers were financially worse off, and what we'll talk about is who was worse off. And we'll show you that the financial declines seem to be more correlated with people who lost income and savings rather than job loss, and we think that that has some really important implications for understand policy as we go forward. At the end, after we present some results, I'll try to give you a little bit of a sense of how we think these results help us understand what may be coming in the next several months. And very briefly, I want to talk about a couple limitations of what we can say. The first is, of course, that when we conducted the waves that we are talking about right now—are really only representative of the early parts of the pandemic. Things may have changed since then. The CFPB has been putting out several reports recently suggesting that at least within things that we can measure from credit bureaus, financial status for many consumers is still better off, better than it was before the pandemic, but many policies are changing rapidly right now. So that may change very soon. Second, we're mostly only going to talk about associations. We are going to be very careful about saying one thing caused another because causation has a very strong sense when you're a researcher and you conduct social science, and so we'll be very careful about when we can say one thing caused another. And, finally, two closely related things, our surveys are not so large that we have a large enough sample size to be always say things are statistically significant, and in particular, while we try to show statistical significance in sample sizes, we won't always be able to make distinctions between smaller groups. For example, we are very interested in understanding how changes might be different by race and ethnicity, and we won't always be able to make that distinction. The large reason is because our sample isn't large enough to be able to say this is different or this is not different by, for example, race and ethnicity. So, with that, I will turn it over to my colleague, Eric, who will tell us more about some of the things that we'll be looking at. >>Mr. Eric Wilson: All right. Thank you, Scott. So, when we wrote our report earlier this year, we set out to get a fairly broad understanding of consumer's financial status. So, to get this, we wanted to know about multiple aspects of their financial lives. We used three different measures to actually get that broad understanding: the financial well-being score, a survey question about difficulty paying for bills or expenses, and naturally people's credit scores. The financial well-being score, for those who have not read our key reports on this is a survey-based measure that we developed, which essentially tells us how people see their financial lives. It's a number from zero to 100, and it's based on five questions that together measure a person's ability to meet their current ongoing financial obligations to securing their financial future and make choices that allow them to enjoy life. The survey question about financial difficulty in turn gives us a general sense of what people say actually happened in their financial lives over the past year. It's a broad question which asks at any time in the past 12 months if a household has had difficulty paying for a bill or expense. Because this measure is so general, it can capture a lot of the different financial problems people can have. And, finally, naturally, credit scores give us information on the actual concrete outcomes people face with respect to credit used. They combine things like credit delinquency, credit utilization, and other key aspects of credit performance that actually are reported by lenders, and so they give us a little bit more of a sense of what's going on at that level. So moving ahead to actual results, we saw improvements across all three of these measures, as Scott said earlier, between June 2019 and June 2020, which was right in the midst of that early phase of the pandemic. We saw about the financial well-being scores increase by an average of 1 point, that the share of people reporting a difficulty paying for a bill or expense decreased by about 4 percentage points, and that credit scores improved by about 11 points. Those asterisks in the Difference column, the improvements that we saw for consumers were actually statistically significant. So Scott mentioned our sample size and some of the limitations there. These findings with asterisks next to them were statistically significant, and that gives us some confidence that what we're observing here actually occurred among the broader population of the folks in the U.S. with a credit record. So, getting into these actual findings, I'll start with financial well-being scores. It's important to know what an improvement of 1 point actually means. A 1-point difference may not seem substantial, but it actually is fairly significant. Some of our previous research has shown that these scores tend to stay fairly consistent over time. So any change in any direction is meaningful. Also, an increase of score in this magnitude when we compare it to credit scores and actually correlate them, it's correlated with an increase in the credit score of about 20 points, so not an insignificant increase there. What essentially drives these changes in the financial well-being score are the actual questions that make up the score. These questions are moving themselves over time, and we saw statistically significant improvements in three of the questions. So people are reporting that they are less concerned that the money that they have will not last. They are more likely to say that they have money left over at the end of the month, and they are less likely to say that their finances control their lives. All of these things are naturally improvements in how people see their finances. We also wanted to look at which demographic groups may have driven overall improvements. There's a lot going on, on this slide, but what this essentially shows is one of the findings that Scott mentioned earlier, that the improvements that we see in financial well-being scores appear to be spread across different racial and ethnic groups and across the income distribution, but it also shows that the differences between these groups remain pretty large. There are a couple of things to note. If you take a look at the differences between racial and ethnic groups in June 2019, there's nearly a 5-point difference between non-Hispanic White consumers and Black and Hispanic consumers. For context, looking further down, that's around twice as large as the difference between those with incomes between 40- and $70,000 and those with incomes between 70 and $100,000. And then looking at changes over time, we aren't able to say as much about these comparisons. As we start splitting up our sample by groups, the sample size for each of these groups gets smaller and smaller, which means that many of the improvements that we see aren't statistically significant. This gives us reason to be a little bit more cautious in our conclusions about how financial well-being changed for those groups within themselves and also about how those improvements actually compare to the other groups in the table, but in general, it appears that the differences in financial well-being scores, at least by income, race, and ethnicity, didn't really appear to widen significantly during the early stage of the pandemic, but they also didn't really seem to narrow either. Getting to our second measure, we saw a decrease of about 4 percentage points in the percentage of folks who have difficulty paying for a bill or expense, but we didn't actually see a decrease in recent or frequent difficulties. So the percentage of folks who said that they had more than one difficulty in the past year didn't really change all that much, and neither did the percentage of folks who had a difficulty in the past 3 months. We also looked at the reasons for difficulty in 2019 versus 2020, and I mentioned that this question captures a lot of the different problems people can have. And this is where we actually captured that information. In June 2020, we saw fewer people reporting difficulties related to medical expenses, and we also saw fewer people reporting issues with auto repair and home repair. There were some differences in how we asked the question between June 2019 and June 2020. In June 2020, we asked about employment outcomes that were related to the coronavirus pandemic specifically, and so those ended up capturing a lot of the difficulties related to job loss that we saw in 2019. So that does it for our first couple measures, and for our third measure of financial status credit scores, I will pass it over to Marie. >>Ms. Marie Rush: Thank you, Eric. Okay, great. So, next we're going to start looking at credit trends over time using our Consumer Credit Panel. So, as Scott mentioned at the beginning in terms of background of the Making Ends Meet survey, one of the really cool features is that it is linked to credit bureau data, and so one of the really interesting ways that we can analyze this data is actually looking at trends over time in the past for people before we had survey data on them and also moving forward. So it's not just a one-point-in-time measurement, like most surveys would be, but we have the ability to track people both in the past and moving forward after the rounds of surveying. In this figure, you'll see the average credit scores between June 2018 and June 2020 with values to June 2019, which hopefully you'll recall is when our Wave 1 survey went out. So we're really trying to make the comparison of what were credit scores like prior to the initial round of surveying and t hen how did they change after that round of surveying including after the pandemic which we have also marked int his graph. As you can see, credit scores did increase steeply during the pandemic relative to the same period a year before. This is exactly the finding that both Scott and Eric were talking about, but I think it helps here just to see the trend of how significant of an increase it was compared to how things were going in the previous year. All right. So, next, we're going to look at trends in two important components of credit score, that being delinquency and credit card utilization. Again, the values are indexed to June 2019. So we're graphing the changes relative to June 2019 in both of these metrics, and the graph shows us that between March and June of 2020—so we indicate March 2020 as the beginning of the pandemic and June 2020 is sort of the end of our data. We can see that credit card utilization declined by 2.4 percentage points, and the share with at least one delinquency on their credit report decreased by 2.2 percentage points, which may not sound like a lot, but it does amount to a relatively significant change in average credit scores. As you can see, the declines here in delinquency and utilization play a significant role in that steep upward trend in credit scores that we saw on the previous slides. Additionally, another factor that might be at play here with the increase in credit scores is that some consumers who might have otherwise had a delinquency show up on their credit report would have instead entered some sort of forbearance or assistance that was offered during the pandemic. So some of the decrease in delinquencies that we see here could be due to the fact that there were a lot of assistance—there was a lot of assistance offered throughout the pandemic to consumers who needed it. Next, we're going to look at trends in credit score by income groups. These are the same income groups that Eric was discussing before, and the main thing to note here is that all income groups across the board experienced an increase in credit score following the onset of the pp, which as you can see is a pretty stark contrast to the trends seen the year prior to the pandemic. Those with $40,000 or less in annual income experienced the largest increase in credit scores between June of 2019 and June 2020, though the differences across groups are not statistically significant, similar to how we mentioned before we can't always tell statistical significantly differences across these smaller groups due to our sample size. It is important to note here that the lowest-income group also had the lowest credit scores throughout the year, actually throughout the whole time period, even after the relatively large increase during the pandemic, so just a reminder that this is showing the changes relative to June 2019 but not necessarily those levels which we had discussed previously. And, finally, we are going to look at credit scores by race and ethnicity. Here, we see that increases in credit scores among Black and Hispanic consumers play an important role in the overall increase in credit scores, again, not statistically significant, which one important thing to keep in mind here is, again, the credit scores prior to the pandemic. So average credit scores among non-Hispanic White consumers were about 100 points above those of Black consumers and about 60 points above those of Hispanic consumers. So similar to the trend seen across income groups, those who had lower credit scores prior to the pandemic experienced the largest increases following the onset of the pandemic. We do also know from other Bureau research that consumers in majority Black and majority Hispanic areas were more likely to receive assistance from lenders, which may play a role in the post-pandemic increase that we're seeing here. At this point, I will turn things back over to Eric to discuss declines in financial status during the pandemic. >>Mr. Wilson: All right. Thank you again, Marie. So we have talked a lot about how financial conditions appear to have improved over the course of the early pandemic, but because we are looking at it was a pretty significant economic upheaval, we also wanted to look at folks whose financial conditions got worse. So this slide and the next few slides will focus on those folks whose financial status actually declined according to our three measures. So what we see from this slide is that around 41.5 percent of people overall saw a decline in their financial well-being score. About 34 percent saw a decline in their credit score, and about 9.8 percent said that they had a difficulty paying for a bill or expense in the past year as of 2020, but when we asked them the same question in 2019, they said that they had not had a difficulty in the past year. So another thing that we see on this slide is that both of these survey measures, the difficulty question and the financial well-being score seemed to be correlated with whether somebody became unemployed as part of the major economic shake-up that began the pandemic, but that credit scores didn't actually move a whole lot. There weren't a whole lot of people who saw a credit score dip after they became unemployed, and that that percentage didn't really differ a whole lot from those who did not become unemployed. So what we do see, though, is that changes in cash flows and changes in savings predicted declines in all three of these measures. So decreases in income and savings were correlated with declines in financial well-being scores and credit scores, and they're also predictive of people experiencing some sort of difficulty where they had not before. Likewise, increases in expenses were correlated with these declines as well. There is also a fairly interesting pattern here with respect to recipients of credit forbearance. We can use the credit report data that we have to actually determine which folks receive forbearance and compare them to each other, compare those folks to people who did not receive forbearance at all. What we see here is that those who received forbearance were more likely to have some form of difficulty in 2020 but not in 2019 than those who didn't receive any sort of forbearance, but that their credit scores weren't significantly greater—or the percentage who saw a credit score decline was not significantly greater than those who didn't receive any forbearance, and that they were actually much less likely to see a decline in their financial well-being score. So this was an instance where some of these measures were actually moving opposite directions, and there's some interesting possible conclusions that we can draw from this. So getting to a little bit of interpretation of what all of these results mean, what we see here is consistent with a couple different things. It could be that a combination of the unemployment insurance expansion as well as Economic Impact Payments meant that a lot of the unemployed consumers didn't necessarily face a large a decline income, and that large decline in income, which was the occurrence that was more correlated with a decline in financial well-being across those three measures didn't necessarily happen for people who became unemployed. Likewise, it's possible that forbearance and other assistance from financial institutions were effective in keeping unemployment from causing default on certain loans causing delinquency, causing people to drive up their credit utilization, and that is what we see where folks are actually saying that their financial well-being scores are better, even when they have a difficulty. It looks like forbearance may have played a role there as well. So there are a few more general takeaways here, and for those, I am actually going to send it back to Scott, and he will take us through those as well as to the finish line of the actual presentation itself. >>Mr. Fulford: Thanks, Eric. So I want to talk a little bit about both some broader questions and then to bring it back to sort of how we can understand how consumers might have been doing more recently and think a little bit about what this might mean for how consumes might be doing through the fall. First, the combination of unemployment insurance and Economic Impact Payments really did seem to mean that unemployed consumers did not necessarily face a large decline income, and that's really important because it really does suggest that despite that rapid rise in unemployment that occurred in March and April 2020, we didn't see nearly as much financial difficulty as many of us were really concerned was going to happen. So that was partly because there was a lot of cash assistance. It was also because forbearance and assistance from financial institutions were really effective at keeping that unemployment from causing default on loans that were reported to credit bureaus. Now, I want to say effective isn't an average thing. That's not to say that every consumer was doing well, but it is to say that, broadly speaking, a lot of the policies were very effective at keeping the problems that consumers were having from causing declines in income, and when consumers did have declines in income from that to spread to at least their formal credit that's reported to credit bureaus. So that's one. Second, that's particularly early in the pandemic, and so while financial status improved early, those gains may not have lasted, and not everyone's financial status really did improve. So I see there's a question in the chat, which I'll respond to as we get to the questions, but one of the nice things is that we actually have been able to track and to follow consumers through looking at what's happening in their credit bureau data, and while unemployment policies have been consistent, we still actually have seen that credit card debt is still down as of this summer, and delinquencies are still down as of this summer. So that's only one portion of how consumers are doing, but it's an important one that it means that we actually can understand that things haven't seemed to unraveled. But that said, a number of these policies have ended recently. So, for example, the $300 pandemic unemployment insurance, extended pandemic insurance that many consumers were getting recently ended at the beginning of September. Eviction moratorium recently ended, and other forbearance policies are ending or slowly rolling off. So things may look different in the near future. Second, I think it's really worthwhile just pointing out more broadly that just because financial status sort of broadly speaking improved, it doesn't at all mean that there was a general improvement in consumers' financial lives. So, just to give you a sense, well, financial status partly fell because consumers were spending less and could no longer go out to travel and restaurants or eat. So, personally speaking, I have two young kids, and my parents didn't come out to see their grandkids for nearly a year. And that was during a time when they were developing, and it was a really painful thing, and so I'm sure all of—I'm sure many of you have similar stories, and so the fact that my parents weren't spending the money to come out to travel doesn't mean that their receiving more, doesn't make them better off. It just means they had more in savings. So, in general, what we want to think about is consumers having their financial situation to do the things that they want to do in their lives, and the pandemic often took that away from us. So, very briefly, what's next for the Making Ends Meet survey? Well, very soon, we're hoping to be able to tell you a little bit more about how consumers were doing in February 2021 from Wave 3, and the reason we're really excited about that is we have to really think very deeply about what we can understand and how we can understand the effects of that pandemic. But more generally, we're putting out a series of reports on using our survey data. So we had an initial report that Marie and I wrote about what we understood about how consumers are doing in our first wave in June 2019. We've talked about credit card debt and how even for consumers who were having real financial difficulties before the pandemic, it seems to have fallen. We've done some reporting on consumers using small-dollar loans, such as payday, auto title, and pawn loans, and most recently, just late last week, we put our a report thinking about the financial conditions of renters during the COVID pandemic, which we were truly excited about. So I leave it for questions, and I did see that there were some questions in the chat already, and so maybe I'll just respond to those initially or ask Marie and Eric to respond. First, I see there's one asking about what do you attribute the increasing credit scores during a pandemic to, and that's actually one of the places where we actually can talk very causally about some things. So credit scores are directly related to whether you've got a delinquency and among other things, credit utilization. For example, if you're using a lot of your available credit, that tends to reduce your credit score. And delinquencies went way down during the pandemic, and credit utilization went down. Credit card debt went down, and I will paste a link from a blog that one of my colleagues wrote earlier in the summer. Credit card debt and delinquencies are still down at least as of 2 months ago. So credit scores have actually continued to go up. Some of that is, of course, directly from policy, so the CARES Act, for example, had some very specific requirements of what could be reported if a consumer was having trouble. And let's see. I'm sorry. Apparently, I am not close enough to the microphone. I apologize if I'm not quite loud enough. So I'll pause here if there are other questions. So, Marie and Eric, there are also some questions in our private chat, and so I'll try to look at some of them, but if you want to jump in, if you've got some that you want to talk about—so one question, were those changes affected by extra unemployment funded provided to consumers? So we think that that was important. We want to be very careful about making causal statements, but there has been some really interesting work that has been able to look at individual consumers' bank accounts, anonymized bank account data that has been able to look very carefully and see that for individual consumers who became unemployed, who were then able to get the additional CARES Act $600 and then more recently the $300 that was from the December omnibus bill and the American Rescue Plan, that that's actually been very helpful in keeping individual consumer spending up, and when it's rolled off, for example, the CARES Act $600 stopped on July 31st in 2020, it meant the consumer spending declined. And consumers started using up their savings. Marie and Eric, are there questions that you are seeing? I don't want to— >>Mr. Wilson: Sure. This is Eric. I'll jump in on the question asking about forbearance. One attendee asked, What types of debt does our definition of forbearance include? And I'll say that it includes auto loans, mortgages, and credit cards. It does not include student debt, and the reason that it doesn't include student debt is because so many recipients of student debt forbearance got forbearance by default when the Federal Government paused payments. So, when we were looking for the correlation between receipt of forbearance and financial status, we didn't want essentially saturation of student debt forbearance to mask some interesting results. >>Mr. Fulford: So answering a different question, an attendee asked, as stimulus funds may have helped during the pandemic, what are some of the potential challenges we should expect as funds decline? So I want to be very careful, just as we said initially. This is not a representation of the Bureau. These are, of course, my own thoughts. But I think one of the things that we should expect—and this is based on both what happened earlier in the pandemic as some of those funds rolled off, but also sort of where we have seen things happening—so, first, one of the things for many consumers—I want to make sure I'm saying many consumers, not all consumers—that both savings have increased, and many debts have declined. So credit card debt is down substantially, and at least the evidence that we have is that high-cost debts, things like payday loans that often get revolved are also down, and consumers have accumulated some savings. Again, not all consumers. Some consumers are still struggling. So, overall, we should expect more of a slow return as delinquencies increase, as consumers have difficulties paying bills, but there does seem to be something of a pushing that's built up over the pandemic. So I don't think we should necessarily expect sort of a spigot to turn where everything necessarily becomes a problem, although for certain consumer segments, there may be additional problems. So I think that we are monitoring it very closely and are very interested in understanding how consumers will—how and when there will be problems as consumers start—as at least the current policies roll off. >>Dr. Brown: There's another question that asks—they acknowledge that it's difficult to measure, but is there any way to look at whether friends and family are helping to keep people afloat? >>Mr. Fulford: That is an excellent question. It's really exciting. So, first, just acknowledging, it is a really hard thing to measure. It is something that we are thinking actively about for measuring as we continue surveying. There is some evidence that that differs across different groups, and so it might be a really important way of understanding some of the racial and ethnic differences or income differences that we're understanding. I don't think we have a great measure of it right now for this report, but we are really interested in understanding that better, social networks, by which I don't mean Facebook. I mean networks among people are really an important way that people help each other, but they also can provide—they can help each other, but they can also provide a dream that maybe I have to actually help all of my friends and family whenever I'm doing a little better, so understanding both sides of that and understanding how people can help each other but also—and it is very important. >>Dr. Brown: It looks like there is a couple of other questions that are coming through Teams behind the scene that went straight to the host. One is—I'm not sure if you answered this already, but if you did, forgive me. So doesn't forbearance while having a possible positive impact immediately simply delay the expenses the consumer will have, particularly in a case of those who lost jobs? >>Mr. Fulford: So forbearance is complicated, and in particular, as the question says, most forms of forbearance are simply a delay in the debt that is owed, not a forgiveness of the debt. So, for example, the student loan payments freeze doesn't remove student loan payments. It doesn't remove the student loan debt. It just means that those who wanted to do not have to pay the student loan at that point. One of the things that the Bureau has been working very hard on is to make sure that as consumers exit forbearance, they are not suddenly facing a balloon payment, but that doesn't mean that the payment has gone away. That doesn't mean that the debt has gone away. >>Dr. Brown: Thank you so much. There's another question, and I feel like you may have sort of answered this, but just in case, I'm glad you stated the comment about the financial status improvements and less spending. How does this impact various ethnicities? >>Mr. Fulford: So this is one of those things where at least within our sample, it's hard for us to be overly precise because we have essentially our small group problem, but what we have seen, for example, is credit card debt declined for all races and ethnicities that we can measure. And so it does seem that for many consumers—I want to be clear that there are differences across consumers. Some consumer groups, racial and ethnic groups had more employment, had less ability to limit what they were spending on, but it does seem to be fairly common that, for example, credit card debt went down across groups. >>Dr. Brown: Excellent. And there is one last question that somebody had asked, that basically I think they said so this information helps to inform tools and resources, and I think they may be saying, "How? How does it?" And I thought I would just throw in I think this information is hugely helpful when you are working with individuals to help them know that they're not alone, that what people are going through. For example, we saw a large percentage of the negative impact, people that had lost jobs, and so if you're working with somebody that faced job loss, you can let them know they're not alone, and they were among the hardest hit, and that it also gives you priorities for things to work on like finding them career support so they can try to get back into the workforce and doing those things that will make a difference. Additionally, I think it was really helpful to see how our researchers are using the financial well-being scale and the scores coming from that along with credit scores and other things, and you can also do this with that financial well-being score. The scale and the tools are available online. There's a toolkit to explain how to use it. We have past webinars on it, and you can use it in research you're doing on your populations as well to justify grant funding, to just justify the work that you're doing, and to just put some numbers to the kind of great work that I'm sure everybody is doing every day out there. So, hopefully, that helps, and if you need some other ideas on how this research might help you where you are, feel free to email that CFPB_FinEx@CFPB.gov, and I'll be happy to either have a chat with you or email you with some more ideas. Okay. So I think that's all the questions I saw. Did I miss anything, Marie or Scott or Eric? >>Mr. Fulford: There's one that just came in over the WebEx chat, but we are almost at time. First, I'll just thank you, Heather and Susan, for facilitating and introducing, and I'll just answer really briefly the question: "I'm assuming you didn't anticipate the pandemic when surveying people in 2019. What was the original intent of the survey?" So it really was to understand the broad sense of what happens when people have difficulties, to understand just the scope of that problem, to understand some of the thought going into it, and to better understand some of the ways that we can help people who are having financial difficulties both avoid them but also have what might to help keep a momentary problem from ending up being a broader problem that affects their lives for longer. So we really want to understand what are some of the shocks that people have, what are some of the problems that they face, and where do we think policy broadly speaking can be best focused to help people with the problems that they're having. And, of course, then we had a pandemic which would change many of our research plans, but we were hoping that we can—so, yes, change many of our research plans. >>Dr. Brown: Well, thank you very much, Scott, Marie, and Eric. This was a great presentation, very informative. Also, I'd like to thank Susan and Tracey, our events managers, for doing such a great job and giving us the cues and questions as we needed them. We appreciate you. I also wanted to let everyone know that our next webinar is going to be on tips to help your clients get smart about credit, and that will be on October 21st from 2:00 to 3:00, and when I get off of here, I'm going to make sure that everybody that has registered will get their slide deck, and the rest of you can email the box. And I'll try to get those in as well. So thanks again, everybody, for attending. We had a great crowd, and I look forward to seeing you at the next session. This concludes our webinar. Have a great day. [End of recorded session.]