APRIL 2004

ABA Delinquency Measures Mixed

The latest results from the American Bankers Association (ABA) quarterly survey of a panel of 400 banks nationwide revealed "...a rare combination where credit card delinquencies increased as all other consumer lending delinquencies declined," according to James Chessen, the ABA’s chief economist.

In the fourth quarter of 2003, the number of bank credit card accounts that were 30 or more days past due reached a record high of 4.43 percent (seasonally adjusted), an 8.8 percent increase over the fourth quarter of 2002. The previous record of 4.09 percent of accounts was set in the third quarter of 2003. Chessen noted that "[w]eak job creation kept credit card delinquencies at persistently high levels. The average length of unemployment remained near 20 weeks in the fourth quarter."

Meanwhile, the composite ratio of closed-end consumer installment loans that were 30 or more days past due marked its lowest reading since 1995. For the fourth quarter of 2003, the delinquency rate for this summary of accounts (including, for example: personal, auto, property improvement, and home equity loans) was 1.89 percent (seasonally adjusted)—a 12.5 percent decrease from the same period in 2002.

Chessen summed up the survey’s results: "It’s clear that some consumers are doing better, which is a sign that the economy is turning around...[however]...the improving economy has not yet touched all individuals, particularly those who continue to look for work and may be relying on credit cards to meet their daily living expenses."

See Larger Chart