Saturday, February 22, 2014

Consumer Delinquencies Fell in Third Quarter

Jan 15th, 2014 @ 9:48 PM by Amber Nelson

Consumers did better at managing their debt in six of eight different loan categories in the 2013 third quarter, according to a recent survey from the American Bankers Association.

The ABA’s Consumer Credit Delinquency Bulletin found that all taken together Americans were delinquent – by 30 days or more – on 1.63 percent of all their loans, down from 1.76 percent in the second quarter and a record low. By comparison, the average rate of that composite ratio has been 2.35 percent for the last 15 years.

“More jobs and higher income are a recipe for lower delinquencies,” said James Chessen, ABA’s chief economis in a statement. “Consumers also continue to do a good job of monitoring their finances and keeping debt at manageable levels.”

The ABA reported that delinquencies declined in the following loan categories: personal loans, indirect auto loans, mobile home loans, RV loans, marine loans and home equity loans. Direct auto loans did not see a change in the delinquency rate at 0.88 percent, but the one increase was in property improvement loans where the number of accounts behind on payments rose to 1.25 percent in the third. quarter from 0.80 percent in the second.

The ABA also tracks a few “open-end” loans, including bank cards, home equity lines of credit and non-revolving loans. The biggest surprise among those was an jump in bank card delinquencies, which rose to 2.42 percent from 2.55 percent. Still, Chessen pointed out that even the current rate is 30 percent lower than the 15-year average.

He predicted that things will continue to get better but warned consumers to be watchful.

“Delinquencies are likely to remain at reasonably low levels for the next several quarters as the economy continues to improve and jobs and income continue to grow,” Chessen said.  “At the same time, consumers can’t afford to be complacent when it comes to keeping debt levels under control.”

About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to and

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