Thursday, January 5, 2012

Consumer Delinquencies Fall in Most Loan Categories in Third Quarter

Consumer credit delinquencies fell in seven of 11 loan categories in the third quarter, and rose only slightly in two others, according to the ABA Consumer Credit Delinquency Bulletin that was released today.

The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, dropped to 2.59% of all accounts, 29 basis points lower than the previous quarter and 42 basis points lower than 2010’s third quarter.

Bank card delinquencies were stable, rising just three basis points to 3.25%. That was well below both the 3.64% registered in 2010’s third quarter and the 15-year average of 3.94%.

“Household debt levels continue to fall and are getting easier to manage. Subtle improvements in the economy such as lower gas prices and a better job market have reduced some of the stresses facing consumers,” ABA Chief Economist Jim Chessen said.

“Improvement in delinquencies over the next year hinges on the housing market, which still poses an enormous challenge to continued economic growth. Job creation and income growth are also a must if we hope to see delinquencies continue to fall,” he said.

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