Consumer Delinquencies Improve in Q2

Delinquencies in closed-end loans held steady in the second quarter of 2017 while bank card delinquencies fell and home-related categories continued their decline toward normal levels, according to the ABA Consumer Credit Delinquency Bulletin released today. The composite ratio, which tracks delinquencies in the closed-end installment loan categories, remained at 1.56 percent of all accounts — well below the 15-year average of 2.16 percent.

Delinquencies in both direct and indirect auto loans edged up 1 basis point to total 1.04 and 1.84 percent of all accounts, respectively, but both remained below 15-year averages. Bank card delinquencies fell 7 basis points to 2.67 percent of all accounts.

Delinquencies were down in all three home-related categories and remained below 15-year averages. Home equity loan delinquencies fell to 2.5 percent of all accounts, while home equity line of credit delinquencies fell to 1.07 percent and property improvement loan delinquencies fell to 0.95 percent.

“We’re in the ninth year of economic expansion when you might expect the pendulum to begin swinging the other way, but delinquencies remain below historical levels as consumers continue to show great command of their finances,” said ABA Chief Economist James Chessen. “The outlook remains very positive, as the strong job market, growing wages and rising wealth provide the financial wherewithal for consumers to keep current on their financial obligations.”