5.4.21
The Wall Street Journal reports that stock prices of consumer lenders have “soared” with some lenders up more than 40% year to date. Lenders have benefitted from a recovery in loan demand as consumer spending has regained its footing. Investors remain cautious that the current lending boom could create higher defaults in the long-term, however. The WSJ notes that consumer credit risk may continue to be masked by recent stimulus payments and the extension of forbearance debt programs. As the market becomes more liquid and debt remains inexpensive, lenders may experience fierce competition in certain areas which could lead to a loosening of credit standards, and contribute to conditions of excess.