Academic journal article ABA Banking Journal

Installment Losses Stable

Academic journal article ABA Banking Journal

Installment Losses Stable

Article excerpt

Consumer instalment loan delinquencies at banks remained steady during the third quarter of 1991, according to ABA's Consumer Credit Delinquency Bulletin. One measure of bank credit card delinquencies, however, registered a slight increase.

The consumer credit delinquency rate, based on seven types of closed-end instalment loans, was 2.74% as of Sept. 30,1991, virtually unchanged from the 2.73% reported at the end of the second quarter, but above the 2.56% reported a year earlier

A loan payment 30 days or more overdue is considered delinquent.

Based on total number of accounts, delinquencies on bank credit cards decreased to 3.19%, from 3.23% in June; however, based on total dollars owed, the rate of delinquency increased to 4.54%, from 4.48% in June.

"These results reflect the moderation in the recession that occurred last summer; however, we do not yet see a reversal in the generally upward trend in consumer credit delinquencies that began in the mid-1980s," says ABA Chief Economist Robert Dugger.

Reductions in interest rates may have helped households with variable rate loans, such as home equity lines of credit, to pay down debts, he says, but consumer balance sheets remained strained by economic conditions. …

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