WASHINGTON, D.C. — Direct auto loan delinquency levels continued on an unprecedented stretch of low readings during the third quarter, according to the American Bankers Association's Consumer Credit Delinquency Bulletin.

The auto loan category dropped below its previous low-water mark established during the first quarter of 2011. The third-quarter reading came in at 1.15 percent. In the first quarter, it was 1.20 percent, and in the second quarter it settled at 1.23 percent.

During the third quarter of 2010, direct auto loan delinquencies stood at 1.74 percent.

According to ABA's records going back to 1990, only one other stretch has there been a time when direct auto loan delinquencies have been at 1.50 percent or lower. That period happened for three consecutive quarters beginning during the second quarter of 1994 when the reading was 1.31 percent.

The latest bulletin showed indirect auto loans performed better during the third quarter, too. Delinquencies for that vehicle contract category dropped to 2.60 percent during the third quarter, improving from the year-ago level of 3.02 percent.

All told, ABA officials discovered consumer delinquencies fell in seven of 11 loan categories in the third quarter with two categories — bank cards and home equity lines of credit — holding virtually steady.

The latest bulletin indicated the composite ratio, which tracks delinquencies in eight closed-end installment loan categories, fell 29 basis points to 2.59 percent of all accounts in the third quarter. That compares to 3.01 percent in the third quarter of 2010.

Officials determined bank card delinquencies rose just three basis points to 3.25 percent, compared to the previous quarter, and remain well below the 15-year average (3.94 percent). They indicated only non-card revolving loans and mobile home loan delinquencies showed increases.

The ABA report defines a delinquency as a late payment that is 30 days or more overdue. The association added all figures are seasonally adjusted based upon the number of accounts. 

In other year-over-year loan category movements that pertain to dealers, ABA found:

—RV loan delinquencies fell from 1.42 percent to 1.38 percent.
—Marine loan delinquencies fell from 1.83 percent to 1.72 percent.

ABA chief economist James Chessen explained the results show that consumers continue to make progress rebuilding their financial base.

"Household debt levels continue to fall and are getting easier to manage. Subtle improvements in the economy such as lower gas prices and a better job market have reduced some of the stresses facing consumers," Chessen surmised

In addition, ABA contends delinquency rates on housing-related loans showed signs of stabilization in a still-struggling sector.

"The housing market is still ill, but signs of a turning point are beginning to appear," Chessen projected.

To back his assertion, Chessen mentioned home equity loan delinquencies fell 26 basis points to 4.12 percent of all accounts in the third quarter, property improvement loans fell 11 basis points to 0.96 percent of all accounts, and home equity lines of credit essentially held steady, rising just two basis points to 1.93 percent of all accounts.

Looking forward, Chessen highlighted that he expects slow improvement in the composite index but bank card delinquencies to stay near current levels.

"Improvement in delinquencies over the next year hinges on the housing market, which still poses an enormous challenge to continued economic growth. Job creation and income growth are also a must if we hope to see delinquencies continue to fall," he concluded.