WASHINGTON, D.C. — In an interesting twist, the American Bankers Association recently reported that delinquencies on indirect and direct auto loans have declined.

According to the ABA's Consumer Credit Delinquency Bulletin, indirect auto loan delinquencies fell from 3.09 percent to 3.07 percent.

Meanwhile, direct auto loan delinquencies dropped from 1.92 percent to 1.77 percent.

These findings run contrary to data out this week from Experian Automotive, which analyzed delinquencies on auto loans across credit segments. An in-depth look into Experian's statistics will be offered in Thursday's SubPrime Update.

According to ABA Chief Economist James Chessen, the federal economic stimulus payments helped to keep delinquencies in check.

"Having that financial shot in the arm appears to have helped some Americans pay off debt during the second quarter of 2008," he said. 

"Borrowers are also being more cautious in adding to their overall debt, which is prudent in the face of a slowing economy," Chessen added.

The composite ratio, which tracks eight closed-end installment loan categories, rose just six basis points to 2.68 percent.

The slight increase in the composite ratio was largely due to home equity loan delinquencies, which is sign of continued weakness in the housing market, officials noted.

Home equity loan delinquencies jumped 22 basis points to 2.56 percent. Personal loans also saw increased delinquencies. 

Moreover, a very slight climb in delinquencies was observed in credit cards, which were up three basis points to 4.54 percent. 

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

The second quarter composite ratio is made up of several closed-end loans, in addition to direct and indirect auto financing. All figures are seasonally adjusted based upon the number of accounts.

The other factors contributing to the composite ratio included:

—Home equity loan delinquencies increased from 2.34 percent to 2.56 percent.

—Property improvement loan delinquencies fell from 1.78 percent to 1.49 percent.

—Marine loan delinquencies declined from 1.75 percent to 1.54 percent.

—RV loan delinquencies were down from 1.11 percent to 1.07 percent.

—Mobile home loan delinquencies fell from 3.22 percent to 3.03 percent.

—Personal loan delinquencies increased from 2.55 percent to 2.67 percent.

Chessen said consumers still face formidable headwinds as the economic recovery is still months away.  

"The collision of falling home values, declining stock prices and rising everyday expenses has severely dented the financial security of many people. Until these factors improve, the overall resources of American families will be stretched," he concluded.