Getting Delinquencies Back on Track
Consumer loan delinquencies are on the mend, dropping in eight of 11 loan categories, according to the American Bankers Association.
Marine loan delinquencies fell 58 basis points to 1.63% in the fourth quarter of 2009, while bank card delinquencies dropped 38 basis points to 4.39%.
On the auto side, 30-day late payments improved 10 basis points for direct loans, to 2.04%. Remarkably, direct loan delinquencies have declined to below-historical norms.
What’s troubling is the delinquency pattern for indirect auto loans. The ABA tracked fourth-quarter delinquencies at 3.15%, flat with the prior quarter.
Take a look at this chart:
Granted, we’ve seen improvement for most of 2009, but the bottom line is that indirect delinquencies are still about a point higher than they have been for the past decade.
Will indirect delinquencies continue to improve, or will 3% become the new norm?
