ABA: Direct Auto Loan Delinquencies Up
WASHINGTON — In an interesting turn, the American Bankers Association announced that indirect auto loan delinquencies are down for the first quarter; however, direct auto loan delinquencies are up slightly.
More specifically, the association's latest Consumer Credit Delinquency Bulletin found that indirect auto loan delinquencies fell from 3.13 percent to 3.09 percent, while direct auto loan delinquencies increased from 1.90 percent to 1.92 percent.
Furthermore, the association discovered that continued stress in the housing market combined with general weakness in the overall economy contributed to an increase in the delinquency rates for home equity lines of credit and bank cards.
The percentage of HELOC accounts that were more than 30 days past due were up 14 basis points to 1.10 percent during the first quarter (seasonally adjusted).
This was the highest recorded rate for this category since 1997, although the HELOC delinquency rate remains lower than all other consumer credit categories, officials highlighted
In the same period, bank card delinquencies were up 13 basis points to 4.51 percent. This is slightly above the five-year average delinquency rate of 4.40 percent for this category, the association reported.
ABA chief economist James Chessen said that more consumers are having trouble meeting their obligations because of the confluence of anemic personal income growth, falling home equity and stock values, job losses and rising food and energy prices.
"It was a tough quarter for some people," Chessen pointed out. "Faced with rising food and gas prices and little income growth, fewer resources have been available to manage debt."
Some categories showed delinquencies improving. The composite ratio, which tracks eight closed-end installment loan categories, fell 3 basis points to 2.62 percent. According to the association, this was largely due to a decline in indirect auto loan delinquencies, which fell 4 basis points to 3.09 percent.
The ABA report defines delinquency as late payments that are 30 days or more overdue.
The first quarter composite ratio is made up of the following closed-end loans. All figures are seasonally adjusted based upon the number of accounts.
—Indirect auto loan delinquencies fell from 3.13 percent to 3.09 percent.
—Direct auto loan delinquencies increased from 1.90 percent to 1.92 percent.
—Home equity loan delinquencies fell from 2.39 percent to 2.34 percent.
—Property improvement loan delinquencies fell from 1.81 percent to 1.78 percent.
—Marine loan delinquencies increased from 1.57 percent to 1.75 percent.
—RV loan delinquencies increased from 1.08 percent to 1.11 percent.
—Mobile home delinquencies increased from 2.92 percent to 3.22 percent.
—Personal loan delinquencies increased from 2.48 percent to 2.55 percent.
Chessen said that individuals will see little relief in the near future and, as a consequence, delinquencies will remain elevated.
"The tax stimulus is helping to boost personal income, but persistently high gas and food prices will eat away at overall resources," he said.
Chessen advised consumers to look for warning signs of financial problems and take action quickly.
"Any borrowers on the verge of financial stress should seek out their lenders immediately, as more options are likely to be available when problems are addressed early," Chessen urged. "Ignoring the problem always makes it harder to resolve."