WASHINGTON, D.C. — The American Bankers Association's Consumer
Credit Delinquency Bulletin showed mixed trends in regard to auto-loans during
the second quarter.

ABA found that Q2 delinquencies for direct auto loans —
contracts arranged directly through a bank — fell year-over-year from 0.91
percent to 0.88 percent.

However, second-quarter delinquencies for indirect auto loans — contracts arranged through a third party such as a dealer — rose year-over-year
from 1.66 percent to 1.72 percent.

The association determined consumer delinquencies rose
slightly across most loan categories in the second quarter but remain
significantly below their 15-year average.

The composite ratio, which tracks delinquencies in eight
closed-end installment loan categories, climbed 6 basis points to 1.76 percent
of all accounts in the second quarter. 

Despite this increase, analysts pointed out 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.

ABA chief economist James Chessen attributed the slight
uptick in delinquencies to a sluggish economy and a limit to how much consumers
can improve their financial positions.

"A leveling off in delinquency rates was inevitable after a
four-year downward trend that saw consumers reduce debt and dramatically
improve their personal balance sheets," Chessen said.  "The good news is that delinquency rates
remain near historical lows and are unlikely to spike in the near future."

Chessen noted that consumers may not be able to reduce
leverage much beyond what they've already achieved. 

"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." 

Chessen went on to mention that delinquencies could face an
uphill climb as the economy struggles to reach its full potential.

"Until the lackluster economy shifts into a higher gear, it
is unlikely that delinquencies will move lower in the near term," Chessen said.
"It's possible that delinquency rates will remain stuck in neutral for the
foreseeable future."

The second quarter 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 1.82 percent to 1.94
percent.

—Direct auto loan delinquencies fell from 0.91 percent to
0.88 percent.

—Indirect auto loan delinquencies rose from 1.66 percent to
1.72 percent.

—Mobile home delinquencies rose from 3.92 percent to 3.96
percent.

—RV loan delinquencies held steady at 1.20 percent.

—Marine loan delinquencies rose from 1.50 percent to 1.55
percent.

—Property improvement loan delinquencies rose from 0.74
percent to 0.80 percent.

—Home equity loan delinquencies rose from 3.72 percent to
3.83 percent.

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

—Bank card delinquencies rose from 2.41 percent to 2.42
percent

—Home equity lines of credit delinquencies fell from 1.91
percent to 1.90 percent.

—Non-card revolving loan delinquencies rose from 1.19
percent to 1.58 percent.

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