WASHINGTON, D.C. -

The American Bankers Association’s Consumer Credit Delinquency Bulletin showed mixed movements of consumers maintaining payments on their vehicle loans during the first quarter.

Officials said that Q1 delinquencies associated with direct auto loans — financing arranged directly through a commercial bank — dipped year-over-year from 0.79 percent to 0.76 percent.

Meanwhile, ABA found that delinquencies connect with indirect auto loans — financing originated through a third party such as a dealer — ticked up year-over-year from 1.62 percent to 1.74 percent.

The mixed delinquency movements come as the Federal Reserve indicated commercial banks are raising their interest rates on vehicle financing.

The Fed indicated the average APR on a new-vehicle contract in May came in at 4.50 percent — the highest point since the first quarter of last year.

That commercial bank rate still has to climb higher to reach the points the Fed noticed immediately after the most recent recession. The Fed pointed out the new-vehicle APR average closed 2009 at 6.72 percent and 2010 at 6.21 percent.

Turning back to the ABA’s Delinquency Bulletin, catching the attention most of association chief economist James Chessen was bank card delinquencies declining significantly in the first quarter. Delinquencies for this credit product dropped 16 basis points to 2.44 percent of all accounts

Chessen noted that delinquencies for bank cards are well below their 15-year average of 3.82 percent as consumers continue to improve their financial situations.

This news comes after ABA’s Credit Card Market Monitor found that an increasing number of credit card users are using their cards as a transactional tool rather than as a form of debt.

“Bank card delinquencies remain at surprisingly low levels even as credit card spending increases,” Chessen said.  “More and more consumers are using their credit cards as a payment vehicle, paying off or paying down their balances each month.”

Following two quarters of record lows, the composite ratio, which tracks delinquencies in eight closed-end installment loan categories, edged slightly higher in the first quarter, rising 4 basis points to 1.63 percent of all accounts — well below the 15-year average of 2.33 percent.

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

Chessen noted that consumers continue to responsibly manage their finances, and are better able to manage their debt as the economy improves.

“Consumers have a greater capacity to meet their financial obligations due to an improving economy, low interest rates and the significant deleveraging they’ve done in recent years,” Chessen said.  “A disciplined approach to managing debt has helped people improve their financial positions, keeping delinquencies near historical lows.”

While home equity loan delinquencies rose 9 basis points to 3.57 percent of all accounts, home equity line delinquencies continued their downward trend, falling another 10 basis points to 1.57 percent of all accounts in the first quarter. 

“Home equity line delinquencies have fallen back to what they were five years ago,” Chessen said.  “This is a positive trend in light of the number of home equity lines that will move into the fully amortizing period over the next several years, raising the monthly payment obligations for some borrowers.”

Chessen believes that while delinquencies may vary slightly in the months ahead, they are likely to remain near their current levels. 

“In the wake of significant consumer deleveraging, delinquency rates have reached a cyclical low,” Chessen said.  “With an improving economy and continued consumer vigilance, we expect delinquency rates to fluctuate at this lower end of the range for the foreseeable future.”  

The first quarter 2014 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 1.70 percent to 1.73 percent.

• Direct auto loan delinquencies fell from 0.79 percent to 0.76 percent.

• Indirect auto loan delinquencies rose from 1.62 percent to 1.74 percent.

• Mobile home delinquencies fell from 3.75 percent to 3.37 percent.

• RV loan delinquencies rose from 1.10 percent to 1.14 percent.

• Marine loan delinquencies rose from 1.36 percent to 1.42 percent.

• Property improvement loan delinquencies fell from 1.07 percent to 1.00 percent.

• Home equity loan delinquencies rose from 3.48 percent to 3.57 percent.

In addition, ABA tracks three open-end loan categories. The metrics settled as follows:

• Bank card delinquencies fell from 2.60 percent to 2.44 percent

• Home equity lines of credit delinquencies fell from 1.67 percent to 1.57 percent.

• Non-card revolving loan delinquencies fell from 1.80 percent to 1.79 percent.