Consumer delinquencies remain below 15-year average


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Consumer delinquencies rose slightly across most loan categories in the second quarter, but remain significantly below their 15-year average, according to results from the American Bankers Association’s Consumer Credit Delinquency Bulletin. The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, rose 6 basis points to 1.76 percent of all accounts in the second quarter. Despite this increase, the ratio is still 25 percent below the 15-year average of 2.36 percent.
The ABA report defines a delinquency as a late payment that is 30 days or more overdue. Bank-card delinquencies remained virtually unchanged, rising 1 basis point to 2.42 percent of all accounts in the second quarter — 37 percent below their 15-year average of 3.85 percent.

James Chessen, ABA’s chief economist, attributed the slight uptick in delinquencies to a sluggish economy and a limit to how much consumers can improve their financial positions. “Consumers may find it difficult to further improve their financial positions after years of working to pay down debt,” Chessen said. “Stagnant incomes and a weak job market aren’t going to help change that trend. It’s possible that delinquency rates will remain stuck in neutral for the foreseeable future.”

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