Survey Reflects Consumer Late Payments at Highest Level Since ’92
According to an American Bankers Association survey, consumers have fallen behind in paying car, credit-card and home-equity loans at the highest level in 15 years during the fourth quarter, another sign the U.S. economy is slowing.
Payments at least 30 days past due increased across all eight categories of loans tracked, the Washington-based group said today in a statement. Late loans climbed 21 basis points to 2.65 percent of all accounts in a consumer-loan index created by the group.
"The rise in consumer credit delinquencies is consistent with a rapidly slowing economy,'' ABA chief economist James Chessen said in the statement. "Stress in the housing market still dominates the story, but it's a broader tale.''
Lenders including American Express Co., the third-biggest credit-card network, and Capital One Financial Corp. doubled reserves for soured U.S. debt in the fourth quarter. Overdue bank-card accounts reached 4.38 percent in the quarter, according to the ABA, as the slowing economy made it harder for consumers to repay debt.
The overall increase was driven by late payments for car loans, which make up two-thirds of all closed-end consumer installment loans, Chessen said. Auto loan delinquencies rose to 1.9 percent from 1.81 percent. Overdue mobile home payments rose to 2.92 percent from 2.87 percent.
Federal Reserve Chairman Ben S. Bernanke acknowledged for the first time yesterday that a U.S. recession is possible because consumer spending, employment and homebuilding will deteriorate this year.
Published on April 3, 2008
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