Forbearance appears to be working for Discover Financial Services.
“Of the customers no longer enrolled in the skip-a-payment program, more than 80% are making payments the following cycle and getting back on their feet,” Chief Executive Officer Roger Hochschild told investors at a virtual conference Tuesday. Borrowers may have been helped by the record government stimulus pumped into the economy in April and May, he said.
“The re-enrollment rate is relatively low,” Hochschild said, adding that the company had about $3.3 billion of card loans in the forbearance program at the end of May. “A lot of people took one month and are not renewing for a second month.”
Discover was battered as the coronavirus pandemic stifled economic activity, leaving spending on the Riverwoods, Illinois-based company’s cards down about 30% at the depth of the crisis. Spending has begun to improve, dropping 12% to 13% at the end of May from a year earlier, Hochschild said.
