WASHINGTON -- Consumer loan delinquencies declined in the second quarter, but the improvement may not be sustainable, the American Bankers Association said Friday.

The ABA's composite percentage of closed-end loans at least 30 days past due fell to 2.6%, from 2.75% in the first quarter. The percentage of dollars delinquent also fell to 1.65% from 1.73%, the best reading since the end of 1990.

James Chessen, the trade group's chief economist, said he is concerned that the trend will reverse, or at least seesaw for a while before settling down to pre-recession levels.

"Today, the delinquency rates look like we're standing on our feet," Mr. Chessen said. "Tomorrow, we'll probably be on our head."

Past-Due Card Loans Rose

The ABA's composite statistic, based on a survey of its members, includes automobile loans, which make up about a third of the $722 billion in total consumer installment debt, but not the comparably sized credit card category.

The percentage of delinquent card loans rose in the latest quarter to 2.93% from 2.86%, but the percentage of card dollars overdue declined by 12 basis points, to 4.19%.

Downtrends were also evident in home equity loans and auto loans that banks make directly, as opposed to loans channeled through dealers.

Key Findings

Among the key survey findings:

* Past-due auto loans extended by commercial banks dropped to 2.13% at midyear from 2.37% in the first quarter and 2.255 in the second quarter of 1991.

* Delinquencies on indirect auto loans were 2.62%, little changed from 2.61% in the first quarter but improved from 2.8% a year earlier.

* Home equity delinquencies dropped to 1.65% of loans from 1.73% in the March quarter and 1.70% a year earlier.

* Late payments on mobile homes, one of the categories in the composite index, rose to 4% from 3.49% in the previous quarter.

Closed-end loans included in the composite are personal, recreational vehicle, boat, mobile home, property improvement, home equity, and both direct and indirect auto.

Equity Lines Perform Best

Open-end home equity credit lines continued to have the best repayment record to any type of consumer loan, with 0.69% in arrears during the second quarter, down from 0.81% in the first and 0.90% in the second quarter of 1991.

Delinquencies on education loans jumped to a far more staggering 9.65% in the second quarter from 9.22% in the first.

Lower interest rates and continuing declines in consumer debt loads contributed to the second quarter's improvements, Mr. Chessen of ABA said.

Also, the second quarter is traditionally a time of retrenchment for consumers, as they pay down debts accumulated during holiday shopping sprees.

But underlying problems haven't faded. "I don't see that there's any strong signs of improvement in this economy," Mr. Chessen said, adding that he doesn't expect a full-fledged recovery to take hold until next summer.

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