WASHINGTON, D.C. — The American Bankers Association's Consumer
Credit Delinquency Bulletin showed mixed movements in connection with
second-quarter auto loan activity.

ABA determined second-quarter delinquencies associated with
direct auto loans — contracts arranged directly through a commercial bank — actually
rose from 0.86 percent to 0.92 percent year-over-year.

Meanwhile, the association found that second-quarter
delinquencies tied to indirect auto loans — contracts facilitated through a
third party such as a dealer — fell from 2.41 percent to 2.23 percent.

While the auto sector posted its ups and downs during the
second quarter, ABA highlighted that consumer delinquencies overall continued
to decline in the second quarter

The association noted bank card delinquencies falling to
11-year lows as consumers shore up their financial base in an uncertain economy.

During the second quarter, bank card delinquencies dropped
below 3 percent of accounts for the first time since 2001, falling 15 basis
points to 2.93 percent of all accounts and well below the 15-year average of
3.91 percent.

The composite ratio, which tracks delinquencies in eight
closed-end installment loan categories, fell 11 basis points to 2.24 percent of
all accounts in the second quarter, below the 15-year average of 2.40 percent.

The ABA report defines a delinquency as a late payment that
is 30 days or more overdue.

ABA chief economist James Chessen attributed the improvement
to continued efforts by consumers to manage their finances.

"Consumers are saving more and borrowing less as they work
to pay down debt at a faster rate," Chessen said.

"Economic uncertainty has made consumers hesitant to take on
new debt, and building a stronger financial base has become a priority," he
continued.

While Chessen found the continued decline encouraging, the
report didn't reflect the kind of comprehensive improvement across categories
seen in the first quarter. 

"The lack of broad-based improvement gives us pause about
the future," Chessen surmised.

"The economy experienced turbulence in the second quarter,"
he stressed. "Slow job growth and continued uncertainty means many consumers
will face challenges managing their debt going forward."

Chessen also noted that delinquencies in all three
categories of home-related loans rose in the second quarter.

"While the housing market appears to have turned a corner,
we are many quarters away from seeing improvement filter through to reduce
home-related delinquencies," Chessen said.

Chessen said consumers should be congratulated on their
prudent and cautious behavior toward credit, particularly given the uncertainty
they face.

"Good financial planning is the best defense against
inevitable economic bumps in the road that lie ahead," he said.  "The economic path is far from certain as
Europe continues to struggle and big decisions are needed to deal with the
looming U.S. debt cliff."

Looking forward, Chessen believes that the future outlook
depends on a growing economy with stronger job growth. 

"A robust economy is the best protector against increased
delinquencies," Chessen said.           

The second quarter 2012 composite ratio is made up of the
following eight closed-end loans.  All
figures are seasonally adjusted based upon the number of accounts.

—Personal loan delinquencies rose from 2.01 percent to 2.15
percent.

—Direct auto loan delinquencies rose from 0.86 percent to
0.92 percent.

—Indirect auto loan delinquencies fell from 2.41 percent to
2.23 percent.

—Mobile home delinquencies fell from 3.25 percent to 3.15
percent.

—RV loan delinquencies rose from 1.11 percent to 1.15
percent.

—Marine loan delinquencies rose from 1.44 percent to 1.53
percent.

—Property improvement loan delinquencies rose from 0.83
percent to 0.90 percent.

—Home equity loan delinquencies rose from 4.00 percent to
4.09 percent.

In addition, ABA tracks three open-end loan categories:

—Bank card delinquencies fell from 3.08 percent to 2.93
percent

—Home equity lines of credit delinquencies rose from 1.78
percent to 1.91 percent.

—Non-card revolving loan delinquencies rose from 1.18
percent to 1.35 percent.