Bloomberg by By Felice Maranz and Matt Scully (July 7, 2016)

1Q delinquencies fall q/q as consumers continued to manage finances “responsibly,” as more have jobs, wages/home values are higher, people didn’t overextend themselves during holiday season, ABA says in earlier statement.

  • Composite ratio (tracks delinquencies in 8 closed-end installment loan categories) fell 3bps to 1.38% vs 15-year avg. of 2.23% Personal loan delinquencies held at 1.44%.
  • Direct auto loan delinquencies rose to 0.81% from 0.75%; indirect auto loan delinquencies 1.45% vs 1.54%.
  • 1Q was first time since 2008 with both home equity loan, line delinquencies at or below 15-year averages.
  • Bank card delinquencies fell 5pbs to 2.47% vs 15-year avg. of 3.71%.
  • NOTE: Earlier, Bloomberg Intelligence’s Ryan O’Connell writes delinquency rates for most credit card issuers in 2015 (finance cos., large banks) were half of pre-crisis levels on avg.
  • Improvement may stem mostly from growing U.S. economy, with unemployment <5%; Credit CARD Act may have led banks to tighten underwriting standards.
  • DFS 30-days-past-due loans were 1.7% of credit-card loans vs. 3.6% in 2007; AXP, large banks show similar trend; COF rate 3.4% in 2015 vs 4.3% in 2007, SYF 4.1% in 2015; JPM, BAC, C show similar patterns.