Oct. 3, 2008 at 9:57am

Consumer late payments on the rise

Despite continued economic stress, consumer loan delinquencies rose only slightly during the second quarter of 2008, according to the American Bankers Association's Consumer Credit Delinquency Bulletin.

ABA Chief Economist James Chessen noted that the federal economic stimulus payments helped to keep delinquencies in check, but those days are nearing an end.

"Having that financial shot in the arm appears to have helped some Americans pay off debt during the second quarter of 2008," Chessen said. "Borrowers are also being more cautious in adding to their overall debt, which is prudent in the face of a slowing economy."

The composite ratio, which tracks eight closed-end installment loan categories, rose just six basis points to 2.68 percent. The slight increase in the composite ratio was largely due to home equity loan delinquencies, a sign of continued weakness in the housing market. Home equity loan delinquencies jumped 22 basis points to 2.56 percent. Personal loans also saw increased delinquencies. Moreover, a very slight increase in delinquencies was observed in credit cards, which rose three basis points to 4.54 percent.

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