RV loan delinquency rates rose slightly in the first quarter of 2010, the American Bankers Association reported last week. But this loan type still remained one of the best on the books.
The RV delinquency rate rose from 1.44% to 1.58%, the ABA reported. Most other loan types measured by the ABA had higher delinquency rates.
Meanwhile, consumer loan delinquencies showed broad-based improvement for the third quarter in a row, a sign of continued modest improvement in the U.S. economy, according to the ABA’s Consumer Credit Delinquency Bulletin.
The composite ratio, which tracks delinquencies in eight closed-end installment loan categories, fell 21 basis points to 2.98% of all accounts from 3.19% of all accounts in the previous quarter.
Bank card delinquencies fell more than half of one percent to 3.88% of all accounts which is below the 15-year average (3.93%). This is the first time since the second quarter of 2002 that bank card delinquencies have fallen below 4%. The ABA report defines a delinquency as a late payment that is 30 days or more overdue.
ABA Chief Economist James Chessen said the improvements reflect concerted efforts by consumers to shore up their finances. “It’s clear that consumer balance sheets are improving. People are borrowing less, saving more and building wealth. These are all positive signs, ” he said.
Chessen added that across-the-board improvements in housing-related loan delinquencies indicate stability is returning to the housing market. “This is the first inkling that stability is taking hold in the housing market, but the pace of recovery will still be long and drawn out,” Chessen noted.
Home equity loan delinquencies fell for the first time in two years to 4.12% of all accounts from 4.32% in the previous quarter. Home equity lines of credit delinquencies fell nearly a quarter percent to 1.81% of all accounts from 2.04% in the previous quarter. Property improvement loan delinquencies fell to 1.4% of all accounts from 1.63% in the previous quarter.
“The overall risk in banks’ consumer loan portfolios is improving and will continue to do so,” Chessen said. “Banks are putting losses behind them and following a prudent approach to new loans because the on-again, off-again economy is keeping risk high. Regulators are also demanding that banks remain cautious. With job growth creeping back slowly and personal incomes rising a bit, I’m hopeful that improvements in consumer delinquencies will continue,” he added.
The first quarter 2010 composite ratio is made up of the following eight closed-end loans.
All figures are seasonally adjusted based upon the number of accounts.
- Decreased Delinquencies:
- Direct auto loan delinquencies fell from 1.94% to 1.79%.
- Indirect auto loan delinquencies fell from 3.15% to 3.03%.
- Home equity loan delinquencies fell from 4.32% to 4.12%.
- Personal loan delinquencies fell from 3.63% 3.61%.
- Property improvement loan delinquencies fell from 1.63% to 1.40%.
- Marine loan delinquencies rose from 1.63% to 1.93%.
- Mobile home loan delinquencies rose from 3.41% to 3.65%.
- RV loan delinquencies rose from 1.44% to 1.58%.
In addition, ABA tracks three open-end loan categories:
- Home equity lines of credit delinquencies fell from 2.04% to 1.81%.
- Bank card delinquencies fell from 4.39% to 3.88%.
- Non-card revolving loan delinquencies increased from 1.46% to 1.63%.