Late-payment rates on bank-issued credit cards and auto loans rose during the third quarter of 2016 to their highest levels in more than two years, according to a new report.
The American Bankers Association, which published the data, said that the climbing delinquency rates are an outgrowth of banks' increased appetite for lending in an improved U.S. economy.
"Credit card delinquencies have been so low for so long that it was inevitable that they would start to rise back to more normal levels," said James Chessen, the ABA's chief economist.
The percentage of bank-issued credit card accounts that were at least 30 days late was 2.74% during the third quarter. That number was the highest since the third quarter of 2012.
Still, the ABA noted that the third-quarter credit card delinquency rate was well below the 15-year average of 3.68%.
In auto lending, the delinquency rate for loans made directly by banks to consumers was 0.87%, which was its highest level since the third quarter of 2013. The late-payment rate for bank loans arranged through auto dealers was 1.62% during the third quarter, its highest mark since the first quarter of 2014.
"I think that's market that lenders are going to be paying a lot of attention to," Chessen said. "Any sign there's a hint of rising delinquencies may cause them to rethink how aggressive they want to be in that market."
Also during the third quarter, an index of delinquency rates in eight closed-end loan categories — including personal loans, mobile home loans and property-improvement loans — increased 6 basis points from the prior quarter, to 1.41%.
The news was better with respect to home equity loans and home equity lines of credit as 30-delinquency rates in both categories fell to their lowest levels since 2008. Delinquency rates on home stood at 2.59% for home equity loans and 1.16% for lines of credit at Sept. 30.