Bank Delinquencies Highest Since 2001

WASHINGTON – Loan delinquencies at the nation’s banks rose in the first quarter to their highest since 2001, the American Bankers Association reported yesterday. Delinquencies have been rising steadily over the past year, with the ABA’ index of eight kinds of loans climbing to 2.42% for the first quarter, up from 2.23% at year-end. In comparison, the delinquency ratio for credit unions was just a fraction of that, 0.7%, for the first quarter. James Chessen, chief economist for the ABA, attributed the poor loan performance to slow job growth, falling home prices and weak economic growth. “There are still signs of consumer financial distress, which will continue throughout most of this year as the worst of the housing problem works its way through the economy,” said Chessen. The ABA survey found the delinquency ratio rose in the first quarter for home equity loans (to 2.15%); property improvement loans (1.61%); indirect auto loans (2.73%); personal loans (2.08%); mobile home loans (2.94%); marine loans (1.41%) recreational vehicle loans (1.03%) and decreased slightly for direct auto loans (1.68%). Also, delinquencies for home equity lines of credit, the lowest delinquency category, inched up to 0.60%.