CFPB Study Finds Higher Default Risk Among Young Veterans
What happened
The Consumer Financial Protection Bureau studied the credit records of young veterans. A November 2020 report found that for veterans who served at least seven months, delinquencies and defaults are two to ten times more likely in the six months after separation than in the six months before. The bureau noted that a sizable fraction of young enlisted service members become delinquent on debt payments around the time they leave active duty.
From military.com
Why it matters
The study highlights a significant financial risk during the transition period for service members. This increased likelihood of default among veterans could affect lending models used by financial institutions.
From military.com
Who's involved
- Consumer Financial Protection BureauConducted the study on veteran credit records
- soldierThe group whose credit records were analyzed
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Capital OneSpeculative
Could face increased costs or changes to lending models due to higher default risk among veterans
Possible ripples
Who this could reach next, traced step by step from the reporting. Possibilities worth considering, not forecasts.- Federal Trade Commission may review lending practices after veteran credit studyFTC may review lending practices following CFPB's veteran credit studyPossible
- CFPB study on veteran debt could influence Federal Reserve oversightCFPB study on veteran debt may inform Federal Reserve's financial oversightPossible
- Capital One may face changes in lending models over veteran credit riskCapital One may need to adjust lending models due to higher veteran default riskPossible
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The entities involved
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Consumer Financial Protection Bureau
agency of the United States government responsible for consumer protection in the financial sector
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Army
senior officer in the Australian Army