Tuesday, January 11, 2011

Report: Consumers Still Struggling with Loans

U.S. consumers continue to struggle to pay back home equity, auto and other loans as high unemployment drags on the economy, Reuters reported today. The American Bankers Association said in a report released today that the overall loan delinquency rate ticked up slightly for the second straight quarter. It had been dropping steadily since hitting 3.35 percent in the second quarter of 2009. The overall rate increased to 3.01 percent in the third quarter of 2010 from 3.00 in the second quarter. The ABA defines a delinquency as a payment that is 30 days or more overdue. The association attributed the lack of downward movement to the unemployment rate, which remains high, but said delinquency rates are likely to improve soon. Among the areas where consumers had a more difficult time repaying their debts was in auto loans. The delinquency rate for loans provided by a bank increased from 1.67 percent to 1.74 percent and delinquencies on loans arranged through a dealer or other third party increased from 3.01 percent to 3.02 percent. The delinquency rate on credit cards issued by banks also increased moving to 3.64 percent in the third quarter from 3.62 percent during the previous time period.

http://www.reuters.com/article/idUSTRE70A1U720110111