WASHINGTON, D.C. — The American Bankers Association's Consumer Credit Delinquency Bulletin shared more positive news about the recovering economy this week.

Direct and indirect auto loan delinquencies were among nine of the 11 categories that dropped or remained flat during the fourth quarter of 2009.

The ABA said that direct auto loan delinquencies fell 10 basis points to 1.94 percent of all accounts. The association added that indirect loan delinquencies — accounts arranged through dealers — remained even at 3.15 percent of all accounts.

All told, the association noted this was the second quarter in a row of broad-based improvement. Officials indicated that the composite ratio, which tracks eight closed-end installment loan categories, fell four basis points to 3.19 percent of all accounts compared with 3.23 percent of all accounts in the previous quarter. 

ABA went on to mention that bank card delinquencies fell 38 basis points to 4.39 percent of all accounts, which is below the five-year average of 4.52 percent.

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

ABA chief economist James Chessen stressed that the news is a strong indication that the economy is on an upswing.

"The fall in consumer delinquencies is a very positive and hopeful sign. Clearly, consumers are shoring up their finances and banks are putting losses behind them," Chessen pointed out.

"Overall, there is a prudent approach to credit," he added.

The association cautioned that housing-related loans still showed mixed results.

Officials found that home equity loan delinquencies hit another record, rising to 4.32 percent of all accounts compared with 4.30 percent in the previous quarter. They noted that by contrast, home equity lines of credit delinquencies at quarter-end fell for the first time in six quarters to 2.04 percent of all accounts, compared with 2.12 percent in the previous quarter.  

"This first sign of improvement has been a long time coming and is finally some positive indication that the housing market is stabilizing," Chessen emphasized. 

Chessen went on to say that while most consumers appear to be handling their finances well, the level of consumer credit delinquencies is still heavily tied to job creation.

"People are actively reducing their level of debt relative to their income and are rebuilding their savings," he explained.

"But it's still a very stressful time for many families, and this won't disappear until more people have jobs," Chessen continued. "This will keep delinquencies elevated for the next several quarters."