2017 Forecast Warned of Rising Auto Delinquencies, Hospital Distress, and GSE Stalemate

Auto Delinquencies Were Already Climbing in Late 2017

TransUnion projected in its annual consumer credit forecast, released in December 2017, that auto loans past due by 60 days or more would reach 1.43 percent in the final quarter of 2017, then rise to 1.46 percent by the final quarter of 2018. That represented an 18.7 percent increase from the fourth quarter of 2013, when serious auto delinquencies stood at 1.23 percent.

TransUnion noted that Hurricanes Harvey and Irma would provide a short-term lift to new-vehicle sales in affected markets. Longer term, the company expected a shift toward used vehicles to offset softening demand for new ones. The 2018 projected rate, while rising, was expected to stay below the peaks recorded in 2008 and 2009, according to The Drive's reporting on the forecast.

Nonprofit Hospitals Facing Higher Borrowing Costs

The tax legislation moving through the House at the time proposed revoking nonprofit hospitals' access to the municipal bond market, where investors accept lower yields because the income is exempt from federal taxes. A Bloomberg News commentary on the proposal warned that losing that exemption would raise borrowing costs for smaller, financially weaker facilities.

David Hammer, head of municipal bond portfolio management at Pacific Investment Management Co., said the loss of tax-exempt financing could push borrowing costs up by 1 to 2 percentage points at small facilities carrying a BBB credit rating or below. He called that a potential "meaningful impact on their balance sheets."

Michael Schafer, CEO of Spooner Health, was direct about what that would mean on the ground: "Should tax-exempt financing not be available in the future, it may really harm our ability to build affordable senior housing and assisted living facilities."

Bloomberg data at the time showed at least 26 nonprofit hospitals were already either in default or in distress, meaning they had notified bondholders of financial troubles that raised the probability of bankruptcy. The stressors were not abstract. Labor, drug, and technology costs were rising faster than revenues, and unpaid patient debt was growing at the same time.

The Strongest Counter-Argument on Municipal Finance

The case for eliminating the tax exemption on nonprofit hospital bonds is not without logic. Critics of the exemption argue that it functions as a federal subsidy flowing primarily to institutions that already enjoy nonprofit tax status, that the benefit disproportionately accrues to wealthier, larger hospital systems with better bond ratings, and that the foregone federal tax revenue could be redirected through more targeted programs. From a fiscal-conservative standpoint, open-ended tax exemptions embedded in the bond market are rarely audited for effectiveness and almost never sunset. That is a legitimate argument about government subsidy design, even if the short-term pain for rural and small hospitals would be real.

The Bloomberg commentary did not engage with that counter-argument directly. It framed the issue primarily from the perspective of hospital executives and bond managers, both of whom are interested parties in maintaining the exemption.

Fannie and Freddie: Congress Hits Pause

The House Financial Services Committee passed 13 bills in a marathon December 2017 session, according to National Mortgage News. One of the most significant came from Rep. French Hill (R-Ark.) and would prevent the Treasury Department from selling its preferred stock and warrants in Fannie Mae and Freddie Mac until Congress passed housing finance reform legislation.

Fannie and Freddie had been in government conservatorship since 2008. Nearly a decade later, the question of what to do with them remained unresolved, and Hill's bill was essentially a guardrail against Treasury acting unilaterally before Congress could set policy. The committee also passed a bill described as helping the underbanked in rural areas, though specific terms were not detailed in available reporting.

Why This Still Matters as Context

This December 2017 snapshot is most useful as a baseline. Auto delinquencies did in fact rise through 2018 and beyond. The municipal bond tax exemption for nonprofits ultimately survived the 2017 Tax Cuts and Jobs Act after the Senate version of the bill preserved it. And Fannie Mae and Freddie Mac remained in conservatorship well past 2017, a status that continues to generate legal and policy disputes.

The unresolved question that Hill's bill placed on the table — who controls the exit from Fannie and Freddie conservatorship, Treasury or Congress — was never definitively answered by statute. That tension between executive flexibility and legislative oversight over the GSEs remains an open structural problem in U.S. housing finance as of June 2026.