Consumer lending

Closed showrooms, temporary bans on repossessions and a sudden spike in unemployment have dimmed the prospects of a sector that has boomed since the last recession.

ABS participants saw markets freeze and were bracing for worse when federal aid provide a short-term respite. The question now: How much trust can anyone put in the medium-term and beyond?

If Capitol Hill plans another round of stimulus, Democrats could have more leverage to demand steps such as suspending overdraft fees or placing a temporary cap on consumer lending rates.

Federal Housing Finance Agency Director Mark Calabria said a virus-induced financial crisis might give rise to more delinquencies and foreclosures than the 2007 subprime mortgage meltdown.

The agency has relaxed some reporting requirements and joined other regulators in encouraging banks to help borrowers, but pressure is building on the bureau to do more to aid consumers suffering financial hardship.

The Federal Reserve committed Monday to conducting more asset purchases of Treasury securities and mortgage-backed securities and announced $300 billion in new financing for credit facilities.

Mark Calabria said Fannie Mae and Freddie Mac are currently equipped to handle elevated delinquencies, but they might need congressional or Federal Reserve help if fallout from the coronavirus persists.

The pandemic has upended staffing plans, sparked concerns about servicers’ capacity to handle the expected crush of missed payments, and even raised questions about their ability to stay afloat.

Sens. Sherrod Brown and Elizabeth Warren criticized Director Kathy Kraninger for not issuing any public enforcement actions against auto lenders during her tenure.

With small businesses feeling the financial scourge of the coronavirus, bridge loans could be the direction they turn to keep things afloat.