Consumer loan delinquencies reached their highest levels since 1992 as the weakening economy continued to takes its toll on the American public, the American Bankers Association reported.
According to the group’s Consumer Credit Delinquency Bulletin released today, the composite ratio, which tracks eight closed-end installment loan categories, climbed 21 basis points to a seasonally adjusted 2.65 percent in the fourth quarter.
All eight categories experienced a rise in delinquencies during the quarter, which are characterized as late payments 30 days or more overdue.
Home equity loan delinquencies increased to 2.39 percent from 2.28 percent, while property improvement loan delinquencies rose to 1.81 percent from 1.60 percent.
The number of delinquent bank card accounts also climbed 20 basis points to 4.38 percent, but still remain near the five-year average of 4.40 percent.
James Chessen, ABA chief economist, said an increase in consumer credit delinquencies goes hand in hand with a rapidly slowing economy, and noted that high gas and food prices will lend itself to more problems.
Chessen noted that delinquencies will likely continue to rise during the first half of the year and suggested that overextended borrowers get in contact with their lenders as soon as possible to negotiate financing options.
Recently, analysts have expressed concern that a lack of available home equity could cause borrowers to default on auto loans, credit cards, and other consumer loans.