Lenders today have a credit blind spot; this is because of the provision in the government stimulus package that allows borrowers to defer their debt payments without penalty; these borrowers are not reported as late to the credit bureaus; consequently bank and non-bank lenders have tightened underwriting considerably and reduced loan volume; according to Equifax personal loan volume is down from 226,000 loans in the week ending March 22 to 79,000 loans for the week ending May 10; credit card originations and auto loans were also down considerably; lenders are looking to different data sets to try to measure risk such as cell phone data and cash flow data. The Wall Street Journal.
