Consumer Delinquencies Tick Up, Still Near Historic Lows

Delinquencies in closed-end loans and bank cards rose slightly in last year’s fourth quarter but remain near record lows, according to the ABA Consumer Credit Delinquency Bulletin that was released today. The broader results paint a positive picture, with delinquencies in seven of the 11 individual loan categories falling.

The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, rose three basis points to 1.54 percent of all accounts — well under the 15-year average of 2.29 percent. Bank card delinquencies ticked up one basis point to 2.52 percent of all accounts, also well below their 15-year average of 3.75 percent.

Delinquencies in two of the three home-related categories — home equity loans and home equity lines of credit — trended downward, falling to 3.23 percent and 1.48 percent, respectively. Delinquencies for property improvement loans increased 11 basis points to 0.93 percent.

“The economy is better, incomes are higher and the risk of lending is lower,” said ABA Chief Economist James Chessen. “People have a greater capacity to repay their debts, and we expect delinquencies will continue to fluctuate near these low levels for the foreseeable future.”