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For Immediate Release
January 8, 2019
ABA Media Contact: Mike Townsend
(202) 663-5471 
Follow us on Twitter: @ABABankers

ABA Report: Consumer Delinquencies Rise in Third Quarter


​WASHINGTON — Installment loan and bank card delinquencies resumed a slow return towards normal levels in the third quarter of 2018, but remain low by historical standards, according to results from the American Bankers Association’s Consumer Credit Delinquency Bulletin. Overall, delinquencies rose in six of the 11 categories tracked by ABA while five categories showed improvement. 

DelinquencyBulletinCompositeRatioGraphic - Q3 2018.JPGThe composite ratio, which tracks delinquencies in eight closed-end installment loan categories, rose 11 basis points to 1.87 percent of all accounts, driven primarily by increases in auto and home equity loan delinquencies. The overall composite ratio remains well below the pre-recession average of 2.09 percent (from the first quarter of 2002 to the third quarter of 2007). (See Historical Graphics) The ABA report defines a delinquency as a late payment that is 30 days or more overdue.
“These results are not surprising as the economy moderates following some very robust quarters of growth this past year,” said James Chessen, ABA’s chief economist. “The home and auto sectors have been lagging and that’s where we saw the delinquencies edge up a bit. The good news is that consumers remain confident and financially healthy amid a robust job market and rising wages.”
Following a 13-basis point decrease the previous quarter, delinquencies in bank cards (credit cards provided by banks) increased 12 basis points to 3.05 percent of all accounts – still below first-quarter levels. They remain well below the pre-recession average of 4.33 percent.
“Bank card delinquencies remain low by historical standards, which is a direct result of consumers continuing to do a good job of managing their cards by keeping balances low relative to their income," Chessen said. (See Economic Charts)
Delinquencies rose in two home-related categories and fell in another. Home equity loan delinquencies rose 10 basis points to 2.53 percent of all accounts, above the pre-recession average of 2.12 percent. Home equity line of credit delinquencies fell 1 basis point to 1.14 percent of all accounts, which remains among its lowest post-recession levels but above the pre-recession average of 0.53 percent. Property improvement loan delinquencies rose 7 basis points to 1.14 percent of all accounts, but remain well below the pre-recession average of 1.65 percent. 
Delinquencies in direct auto loans (those arranged directly through a bank) rose 10 basis points to 1.16 percent of all accounts, well below the pre-recession average of 2.09 percent. Delinquencies in indirect auto loans (those arranged through a third party such as an auto dealer) rose 6 basis points to 1.99 percent of all accounts, slightly below the pre-recession average of 2.03 percent.
Chessen expects delinquency levels to continue in step with the natural economic cycle.
“The economy remains fundamentally strong, which helps consumers meet their obligations and remain on solid financial footing,” Chessen said. “We expect fourth quarter numbers will show very strong retail sales, which drives economic growth but can also lead to a financial frostbite if consumers overextend themselves. Prudent consumer spending is key to preventing delinquencies, and every indication is that consumers will continue their sound financial management practices.”
The third quarter composite ratio is made up of the following eight closed-end loans.  All figures are seasonally adjusted based upon the number of accounts.
  • Composite Ratio rose from 1.76 percent to 1.87 percent.
    • Marine loan delinquencies fell from 0.74 percent to 0.70 percent.
    • Mobile home delinquencies fell from 5.07 percent to 4.39 percent.
    • Personal loan delinquencies fell from 1.47 to 1.45 percent.
    • RV loan delinquencies fell from 0.78 percent to 0.75 percent.
    • Direct auto loan delinquencies rose from 1.06 percent to 1.16 percent.
    • Home equity loan delinquencies rose from 2.43 percent to 2.53 percent.
    • Indirect auto loan delinquencies rose from 1.93 to 1.99 percent.
    • Property improvement loan delinquencies rose from 1.07 percent to 1.14 percent.
In addition, ABA tracks three open-end loan categories:
  • Home equity lines of credit delinquencies fell from 1.15 percent to 1.14 percent.
  • Bank card delinquencies rose from 2.93 percent to 3.05 percent.
  • Non-card revolving loan delinquencies rose from 1.57 percent to 1.60 percent.
Consumer Tips
For borrowers having trouble paying down debts, ABA advises taking action -- sooner rather than later -- to solve debt problems.  Proven tips are listed below.  Additional consumer information on budgeting, saving, managing credit and more is available at  
  • Contact Consumer Credit Counseling Services at 1-800-388-2227;
  • Talk with creditors – the sooner you talk to them, the more options you have; and
  • Don’t charge more purchases until your problems are solved.
Indirect auto loan:  loan arranged through a third party such as an auto dealer.
Direct auto loan:  loan arranged directly through a bank.
Delinquency:  late payment that is 30 days or more overdue.
Bank card:  a credit card provided by a bank.
Closed-end loan:  a loan for a fixed amount of money with a fixed repayment period and regularly scheduled payments.
Open-end loan:  a loan with a fixed amount of available credit but a balance that fluctuates depending on usage such as a line of credit.
Non-card revolving loan: an unsecured, open-end loan that is not linked to a credit card. Examples may include lines of credit for overdraft protection or check credit.
The American Bankers Association is the voice of the nation’s $17.5 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $13.5 trillion in deposits and extend nearly $10 trillion in loans.