Stoller 2 07172022

What’s going on with consumer delinquency?

Depends on who you ask, and where you look. addresses this issue in a mid-June 2022 article. Excerpts follow:

Are credit card delinquencies high? Deutsche Bank explains why it matters how they are tracked…Concerns that the U.S. economy could be heading for a recession mount as inflation remains high and the central bank moves to tighten monetary policy. Those pressures have put renewed focus on the financial health of consumers, as soaring prices for gas, groceries and other expenses eat away at savings and paychecks…Credit cards often serve as a first place to look for signs of consumer distress. Still, it’s possible to get a vastly different picture of the delinquency rate…depending on how late payments have been reported, according to a new Deutsche Bank report.

At the high end, the New York Fed Consumer Credit Panel and Equifax data (NY Fed/Equifax) showed a 8.4% credit card delinquency rate in the first quarter of 2022, by including the portion of payments late 90 days or more…The Federal Reserve reported a 1.7% delinquency rate, by focusing on credit cards past due 30 days or more for the same stretch, while credit rating agency Fitch focused on delinquencies of 60 days or more, reporting a small 0.6% rate.

Questions remain over how past due debt is reported. ‘A 90+ day rate should be lower than the 30+ day rate…so what gives?’ Deutsche analysts wrote, in a Friday client note…Digging deeper, they noted that the NY Fed/Equifax consumer credit panel delinquency data included defaulted loans still in collections, while the Fed data from the Call reports and the Fitch ABS index didn’t.

Then, there are credit industry insights from showing first quarter data broken down by asset class type. Charts below include credit cards, auto loans, unsecured personal loans, and mortgage loans.

Q1 2022 credit card trend

Credit Card Lending MetricQ1 2022Q1 2021Q1 2020Q1 2019
Number of Credit Cards492.5 million456.7 million459.6 million434.9 million
Borrower-Level Delinquency Rate (90+ DPD)1.61%1.27%1.98%1.89%
Average Debt Per Borrower$5,010$4,784$5,637$5,545
Prior Quarter Originations*15.5 million18.9 million16.5 million21.5 million
Average New Account Credit Lines*$4,634$3,811$5,135$5,313

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Q1 2022 auto loan trends 

Auto Lending MetricQ1 2022Q1 2021Q1 2020Q1 2019
Number of Auto Loans81.5 million83.3 million83.8 million82.2 million
Borrower-Level Delinquency Rate (60+ DPD)1.63%1.52%1.37%1.32%
Prior Quarter Originations*6.5 million6.7 million6.9 million6.7 million
Average Monthly Payment**$556$492$465$458
Average Balance  of New Auto Loans*$28,415$24,664$22,752$22,117
Average Debt Per Borrower $21,517$19,980$19,256$18,826

*Note: Originations are viewed one quarter in arrears to account for reporting lag.
**Data from S&P Global MobilityAutoCreditInsight, viewed one quarter in arrears.

Q1 2022 unsecured personal loan trends 

Personal Loan MetricQ1 2022Q1 2021Q1 2020Q1 2019
Total Balances$178 billion$144 billion$159 billion$139 billion
Number of Unsecured Personal Loans23.9 million20.8 million23.5 million21.4 million
Number of Consumers with Unsecured Personal Loans20.4 million19.0 million20.9 million19.3 million
Account-Level Delinquency Rate (90+ DPD)2.01%1.76%2.35%2.48%
Borrower-Level Delinquency Rate (60+ DPD)3.25%2.68%3.41%3.50%
Average Debt Per Borrower$9,896$8,817$8,820$8,363
Prior Quarter Originations*5.7 million4.2 million5.2 million5.0 million
Average Balance of New Unsecured Personal Loans*$6,656$5,155$5,548$5,332

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Q1 2022 mortgage trends 

Mortgage Lending MetricQ1 2022Q1 2021Q1 2020Q1 2019
Number of Mortgage Loans51.5 million50.9 million50.7 million49.8 million
Account-Level Delinquency Rate (90+ DPD)0.63%0.74%1.03%1.05%
Prior Quarter Originations*2.9 million4.0 million2.3 million1.4 million
Mortgage Origination* Distribution – Purchase 56%47%57%78%
Mortgage Origination* Distribution –  Refinance44%53%43%22%
Average Balance of New Mortgage Loans*$315,543$294,411$292,754$250,002
Number of HELOC Originations*278,230212,303275,854276,561
Number of Home Equity Loan Originations*201,381177,911181,598169,315

* Originations are viewed one quarter in arrears to account for reporting lag.

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