April 7, 2010: WASHINGTON — According to the American Bankers Association's quarterly Consumer Credit Delinquency Bulletin  late payments for most types of consumer loans decreased in the final quarter of last year.

The Bulletin reported that loans that were 30 days or more past due fell in proportion to overall loans in eight of 11 categories tracked in their quarterly survey.   Housing-related loans, however, showed mixed results suggesting that the real estate market lags all other types of consumer lending in showing signs of overall economic recovery.

ABA chief economist James Chessen, told the Associated Press on Tuesday that, "The decline in loan delinquencies is part of that trend."  He called the survey's numbers "a very positive and hopeful sign."

"Clearly, consumers are shoring up their finances and banks are putting losses behind them," Chessen wrote in a published statement.  Overall, there is a prudent approach to credit."

The Bulletin also reported that delinquencies fell on loans for boats, RVs, mobile homes and home improvement.  Most notably, delinquencies in credit cards issued by banks fell substantially.  Consumers were late on 4.39% of the card payments, which is below the five-year average of 4.52%, and down from 4.77% during the previous quarter.

Delinquent loans made up 2.04%of the money lent for home equity lines of credit , down from 2.12%.  

Auto loans from dealers held showed a delinquency rate of 3.15%, the same as the previous period. 

Delinquency rates rose, however,  for non-card revolving loans and home equity loans, which rose to 4.32% in the fourth quarter, from 4.30% in the previous quarter.

Other delinquent rates reported by the ABA:

• Direct auto loan delinquencies fell from 2.04% to 1.94%.

• Marine loan delinquencies fell from 2.21% to 1.63%.

• Mobile home loan delinquencies fell from 3.63% to 3.41%.

• Personal loan delinquencies fell from 3.74% to 3.63%.

• Property improvement loan delinquencies fell from 1.66% to 1.63%.

• RV loan delinquencies fell from 1.64% to 1.44%

• Indirect auto loan delinquencies remained at 3.15%.

• Home equity lines of credit delinquencies fell from 2.12% to 2.04%.

• Bank card delinquencies fell from 4.77% to 4.39%.

• Non-card revolving loan delinquencies increased from 1.40% to 1.46%.

In categories where delinquencies fell, the rate of delinquency remained well above historical averages.   According to the report, a composite index of delinquencies across all categories fell to 3.19% from 3.23% for the quarter.  Before the fourth quarter of 2008, the number had never exceeded 2.9% in the 20years for which data are available.

Chessen told the Associated Press that he predicted delinquencies will likely remain above historical averages as long as unemployment remains high. Despite modest job gains and improved consumer spending in recent weeks, unemployment has remained unchanged at 9.7%.

Chessen added that he expects delinquencies to remain high for the next several quarters. "It's still a very stressful time for many families and this won't disappear until more people have jobs."

For more information about the Bulletin, please see www.aba.com/Surveys+and+Statistics/ss_delinquency.htm.

Source: The Associated Press