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Delinquencies creep higher on some consumer loans

January 03, 2013|By E. Scott Reckard
  • Fewer Americans are falling behind on their credit card payments, a bankers trade group says, but delinquencies are rising on other types of consumer loans.
Fewer Americans are falling behind on their credit card payments, a bankers… (David Goldman / Associated…)

Fewer Americans are falling behind on their credit card payments, a bankers trade group says, but delinquencies are rising on other types of consumer loans, including home-equity loans and credit lines.

The American Bankers Assn. said Thursday that overall missed payments for eight types of installment loans fell from 2.24% of all accounts in the second quarter to 2.16% in the third quarter. That was well below the 15-year average of 2.4%.

The trade group said bank card delinquencies dropped to their lowest levels since 1994, falling to 2.75% of all accounts -- well below the 15-year average of 3.89%. 

“Consumers are paying close attention to their finances as they continue to pay down debt in an uncertain economy,” the group's chief economist, James Chessen, said in announcing a quarterly assessment of how consumer loans are faring.

Still, some categories of loans showed increases in delinquent loans, those on which borrowers have missed at least one monthly payment. Chessen called those increases, which included an uptick in mobile home, boat and RV late payments, a "cause for concern."

“Some categories have reached historical lows leaving little room for improvement," he said. "In addition, slow job growth, continued uncertainty and falling consumer confidence could signal rising delinquencies in the year ahead.” 

As for the increase in late payments on home equity loans and lines of credit, Chessen said in an email that he expected the trend to reverse because the housing markets are improving. 

"This will take time, however," he said. "We need a more significant improvement in housing overall to drive the numbers down." 

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