Consumer delinquencies fell during the first quarter with some of the most significant drops in home equity loan and home equity lines of credit, according to the American Bankers Association’s recent Consumer Credit Delinquency Bulletin.
The ABA’s composite ratio, which tracks delinquencies in eight closed-end installment loan categories, fell one basis point to 1.53 percent of all accounts, continuing a three-year trend of remaining well below the 15-year average of 2.28 percent, the ABA said.
“It’s highly encouraging that consumers continued to improve their financial situations even during a quarter where the economy contracted,” James Chessen, the ABA’s chief economist, said in a statement. “This speaks to sustained consumer discipline as Americans continue to use and manage their debt responsibly.”
Delinquencies in all three home-related categories fell in the fourth quarter. Home equity loan delinquencies fell 11 basis points to 3.12 percent, home equity line of credit delinquencies fell 6 basis points to 1.42 percent and property improvement loan delinquencies fell three basis points to 0.90 percent.
Bank card delinquencies fell three basis points to 2.49 percent of all accounts, remaining well below a 15-year average of 3.76 percent and they have varied by only 14 basis points since the fourth quarter of 2012.
However, delinquencies increased in three closed-end loan categories. Personal loan delinquencies increased six basis points to 1.48 percent, indirect auto loan delinquencies increased five basis points to 1.58 percent, and RV loan delinquencies increased three basis points to 1.01 percent.
“Falling unemployment, steady job gains and higher incomes may have driven delinquencies rates down to about as low as they can go,” Chessen said. “Maintaining these low delinquency levels is possible as long as consumers remain focused on managing their level of debt. People have done a great job over the last few years and hopefully the lessons of the past will continue to pay dividends well into the future.”
