IMGCAP(1)]
The delinquency rate of U.S.-chartered commercial banks for consumer credit card loans 30 or more days past due increased to a record high of 6.5% for the first quarter, according to a Federal Reserve report released yesterday. The seasonally adjusted delinquency rate is 84 basis points higher than the previous quarter and 174 basis points higher than the same period a year ago. A basis point is one-hundredth of a percentage point. The Fed also reported a seasonally adjusted net charge-off rate of 7.49% of receivables on consumer credit card loans for the quarter, compared with 6.33% in the previous quarter and 4.59% in the first quarter of 2008. The charge-off rate is the highest since the 7.85% reported in the first quarter of 2002, according to the Fed. Moreover, loan officers are predicting a bleak future for credit quality, according to the results of a senior loan officer opinion survey on bank-lending practices the Fed released earlier this month (CardLine, 5/5). A significant majority of banks reported that credit quality for all types of loans is likely to deteriorate over the year if the economy progresses according to consensus forecasts.
