Thursday, January 8, 2015

Key Measure of Delinquencies Hits Record Low

Delinquencies fell in seven of 11 loan categories in the third quarter, 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, fell 6 basis points to 1.51% of all accounts—a record low, well below the 15-year average of 2.32%.

“Strong economic growth has boosted job creation and supported income growth, which has made it easier for consumers to meet their financial obligations,” said ABA Chief Economist James Chessen. “Lower gas prices helped free up resources for everything from new purchases to debt repayment.”

Of closed-end loan delinquencies, only those for mobile homes rose, while direct auto loan delinquencies held steady. Meanwhile, bank card delinquencies rose eight basis points to 2.51% of all accounts, also well below their 15-year average of 3.77%. Home equity line of credit delinquencies also rose slightly.

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