Delinquencies Steady in Most Credit Classes, Up Slightly for Cards
Keenan, Charles, American Banker
Consumer loan delinquencies held fairly steady in the second quarter except for credit cards, which went up for the second period in a row, the American Bankers Association said Wednesday.
The ABA's latest report on delinquency rates-percentages of loans at least 30 days past due-showed declines in automobile, home equity, and other secured categories. The composite ratio for eight types of closed-end loans dropped to 2.35%, from 2.36% at the end of the first quarter.
As a percentage of outstanding dollars delinquent, the composite second- quarter index was 1.83%, down from 1.89% in the first quarter.
Delinquencies among home equity loans dropped 8 basis points from the first quarter, to 1.22% of accounts, the lowest level since 1995.
The midyear reading for credit card accounts, 3.28%, was up from 3.11% on March 31 but down from 3.69% in the second quarter last year. The record high was 3.72% in the fourth quarter of 1996.
There was a silver lining in the card results: The percentage of dollars delinquent fell to 4.57% of outstanding loans, from 5.42% in the first quarter.
"The news overall is positive," said James Chessen, the ABA's chief economist. "The fact we have seen the dollars-delinquent decline says the risk to banks is less that it was."
The general improvement in delinquency numbers indicates that banks have tightened underwriting standards and reduced risk exposure since rates were peaking a year and a half ago, Mr. …