After COVID-19 was declared a pandemic in March 2020, banks and credit unions began offering borrowers hardship accommodations so the trauma of layoffs or furloughs wouldn't be compounded by defaults.
The NCUA and the FDIC encouraged such programs, and the CARES Act in March 2020 expanded eligibility criteria. Borrowers took up the offers in numbers that peaked in May 2020, with many then beginning to slowly exit the programs.
Accommodations caused delinquency and charge-off rates to plummet.
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