Magazine article American Banker

Past-Due Consumer Loans Declined in Second Quarter

Magazine article American Banker

Past-Due Consumer Loans Declined in Second Quarter

Article excerpt

WASHINGTON -- Consumer loan delinquencies declined in the second quarter, but the improvement may not be sustainable, the American Bankers Association said Friday.

The ABA's composite percentage of closed-end loans at least 30 days past due fell to 2.6%, from 2.75% in the first quarter. The percentage of dollars delinquent also fell to 1.65% from 1.73%, the best reading since the end of 1990.

James Chessen, the trade group's chief economist, said he is concerned that the trend will reverse, or at least seesaw for a while before settling down to pre-recession levels.

"Today, the delinquency rates look like we're standing on our feet," Mr. Chessen said. "Tomorrow, we'll probably be on our head."

Past-Due Card Loans Rose

The ABA's composite statistic, based on a survey of its members, includes automobile loans, which make up about a third of the $722 billion in total consumer installment debt, but not the comparably sized credit card category.

The percentage of delinquent card loans rose in the latest quarter to 2.93% from 2.86%, but the percentage of card dollars overdue declined by 12 basis points, to 4.19%.

Downtrends were also evident in home equity loans and auto loans that banks make directly, as opposed to loans channeled through dealers.

Key Findings

Among the key survey findings:

* Past-due auto loans extended by commercial banks dropped to 2.13% at midyear from 2.37% in the first quarter and 2.255 in the second quarter of 1991. …

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