Major U.S. bank executives this week said that they extended forbearance programs to millions of credit card, auto loan and mortgage customers who were financially hard hit by the coronavirus pandemic, Reuters reported. While that is good news for customers who need more time to pay their bills, the delays mean some of the largest U.S. banks may not know how many consumer loans have gone bad until the end of this year or early next. “Significant credit card losses won’t show up until 180 days past the end of (forbearance) programs,” Bank of America Chief Financial Officer Paul Donofrio said yesterday. “I would not expect to see significantly higher losses until 2021.” JPMorgan Chase & Co., Bank of America, Citigroup and Wells Fargo & Co. have all extended programs launched this spring that allow customers to delay payments on their credit card balances or loans without incurring late fees or hurting their credit. The four banks set aside $38 billion this quarter for loans that could go bad, according to Reuters calculations.
