Consumer delinquencies rose a bit in a range of loan categories in the second quarter ended June 30 as a sluggish economy weighed on borrowers' ability to pay down debt, the American Bankers Association reported on Tuesday.
James Chessen, the bank group's chief economist, said in a statement that consumers have focused on paying down debt in recent years, which caused delinquencies to dip.
Delinquencies on personal loans rose to 1.94%, compared to 1.82% in the first quarter, according to the ABA report. Indirect auto loan delinquencies also rose during the period, but overdue payments fell slightly for direct auto loans.
The bank group said delinquencies on bank card payments, which are not included in the composite ratio, rose to 2.42 percent, compared to 2.41 percent in the first quarter.
Chessen said the ABA believes delinquency rates are unlikely to fall significantly any time soon.
"Consumers may find it difficult to further improve their financial positions after years of working to pay down debt," he said. "Stagnant incomes and a weak job market aren't going to help change that trend."
Delinquencies remained well below the 15-year average, the ABA reported. But a composite ratio that tracks late payments in eight loan categories, including personal and property improvement loans, increased during the period.
"A leveling off in delinquency rates was inevitable after a four-year downward trend that saw consumers reduce debt and dramatically improve their personal balance sheets," he said.
The ABA defines a delinquency as a payment that is more than 30 days overdue. It does not track traditional mortgage payments.
Economists and politicians have warned that the current government shutdown could hurt economic growth.
