Delinquencies were mixed in the second quarter, with delinquencies falling for bank cards while rising for the composite index of closed-end loans, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin released today. The composite ratio, which tracks delinquencies in eight closed-end installment loan categories (direct and indirect auto, home equity, marine, mobile home, personal, property improvement and RV loans) rose to 1.88% of all accounts, well below the pre-recession average of 2.09
“Despite some fluctuations, particularly in the auto and home-related sectors, the picture for delinquencies is generally positive,” said ABA Chief Economist James Chessen. “A strong job market and rising wages have provided a solid base for consumers that has kept delinquencies near historically low levels.”
Delinquencies were up in eight of the 11 categories tracked by ABA, while falling in three. Among the open-ended loan types tracked, bank card delinquencies fell six basis points to 2.98% of all accounts, remaining far below the pre-recession average of 4.33%. Meanwhile, non-card revolving loan delinquencies edged up from 1.66% to 1.71%. Delinquencies on home equity lines of credit fell from 1.1% to 1.06%.
Chessen noted that he expects delinquencies to remain around current levels for the near term. “Maintaining a robust job market and strong income levels will help keep future delinquencies at low levels,” he said. “Nearly 15 million jobs have been created over the last six years, which has boosted income and made it easier for consumers to meet their obligations. Consumers are spending in line with their income as they make concerted efforts to increase their savings. This all adds up to a healthy and strong consumer sector.”
