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Banking Group: Consumer Delinquencies Hit Record Low in Q2 2021

  • Consumer delinquencies hit a record low across a number of delinquencies, according to the American Banking Association
  • Report does not include business loans, but encompasses a wide range of home, auto, and personal loans
  • Delinquencies highest in home equity loans and lowest in personal loans

Summary by Dirk Langeveld

Consumer delinquencies on a wide variety of bank loans fell to a record low in the second quarter of 2021, according to the American Bankers Association’s latest Consumer Credit Delinquency Bulletin.

The report did not encompass business loans, but included several closed-end and open-end loans. The composite ratio tracking delinquencies in eight closed-end installment loan categories (including home, auto, and personal loans) fell to 1.21 percent, the lowest level since the ABA began tracking data in 1993.

“Consumers’ financial health generally continued to strengthen in the second quarter due to the robust jobs recovery and another round of federal stimulus payments,” said ABA Chief Economist and Head of Research Sayee Srinivasan. “These factors helped households shore up savings and meet their financial obligations.”

The ABA defines a delinquency as a borrower being at least 30 days late on a payment. Delinquencies fell in nine of the 11 categories tracked.

Home equity loans and personal loans, two options often used by entrepreneurs, accounted for both the highest and lowest delinquency rates during the quarter. A total of 3.42 percent of consumers were delinquent on home equity loans, while just 0.26 percent were delinquent on personal loans.

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