WASHINGTON, D.C. — The American Bankers Association's Consumer Credit Delinquency Bulletin found that both direct and indirect auto loan delinquencies dropped in the second quarter.

ABA revealed that direct auto loan delinquencies declined from 1.79 percent to 1.67 percent.

Meanwhile, indirect auto loan delinquencies fell from 3.03 percent to 3.01 percent.

Across the board, ABA discovered that consumer loan delinquencies improved, with bank cards, home equity loans and auto loans all showing improvements.

"The results were not as broad-based as the previous two quarters, and as a result, the composite ratio, which tracks delinquencies in eight closed-end installment loan categories was virtually flat, rising just 2 basis points from the first quarter to 3 percent of all accounts in the second quarter," ABA officials highlighted.

Bank card delinquencies declined 26 basis points to 3.62 percent of all accounts and remain below the 15-year average of 3.93 percent.

Officials stressed that this is the lowest bank card delinquencies have fallen since the first quarter of 2001.

Why such a drop? According to James Chessen, ABA chief economist, this is due to banks continuing to write off loans that have not been repaid, along with consumers being "more prudent" with their spending.

"Consumers continue to focus on reducing debt levels, using credit cards less and building savings," Chessen pointed out. "This is very positive, but the fundamental story is the same: It's all about jobs. When people don't have jobs, they can't pay their bills.

"High numbers of unemployed workers and slow job growth continue to paint a picture of financial stress for many households," he continued.

Loan categories showing the most stress included mobile home loans and marine loans, according to ABA.

Mobile home loan delinquencies climbed 36 basis points from the previous quarter to 4.01 percent, which is the highest rate since October 2005.

As for marine loan delinquencies, they rose 27 basis points from the previous quarter to 2.20 percent.

"The economic momentum over the last few quarters seems to be losing steam," Chessen explained. "This will affect job creation and the ability of consumers to pay off debt. I think delinquencies will continue to improve but at a slower pace, reflecting the struggling economy."

ABA's overview of loan trends revealed:

Decreased Delinquencies:

—Direct auto loan delinquencies dropped from 1.79 percent to 1.67 percent.

—Indirect auto loan delinquencies fell from 3.03 percent to 3.01 percent.

—Home equity loan delinquencies declined from 4.12 percent to 3.97 percent.

—Personal loan delinquencies dropped from 3.61 percent to 3.55 percent.

—Property improvement loan delinquencies fell from 1.40 percent to 1.35 percent.

Increased Delinquencies:

—Marine loan delinquencies rose from 1.93 percent to 2.20 percent.

—Mobile home loan delinquencies jumped from 3.65 percent to 4.01 percent.

—RV loan delinquencies climbed from 1.58 percent to 1.63 percent.

Open-End Loan Trends

—Home equity lines of credit delinquencies were unchanged at 1.81 percent.

—Bank card delinquencies fell from 3.88 percent to 3.62 percent.

—Non-card revolving loan delinquencies fell from 1.63 percent to 1.21 percent.