Consumer loan delinquencies generally improved in the second quarter of 2010, as bank credit card accounts, home equity loans and auto loans all showed improvement, according to the American Bankers Association’s (ABA) Consumer Credit Delinquency Bulletin. 

The results were not as broad-based as the previous two quarters and, as a result, the composite ratio, which tracks delinquencies in eight closed-end installment loan categories, was virtually flat, rising just 2 basis points from the first quarter to 3 percent of all accounts in the second quarter.

Bank card delinquencies fell 26 basis points to 3.62 percent of all accounts, which remains well below the 15-year average of 3.93 percent. This is the lowest that bank card delinquencies have fallen since the first quarter of 2001.  The ABA report defines a delinquency as a payment that is 30 days or more overdue.

ABA Chief Economist James Chessen said part of the reason bank card delinquencies have been falling is that banks continue to write off loans that have not been repaid, but also because consumers are being prudent with their spending.

 “Consumers continue to focus on reducing debt levels, using credit cards less and building savings,” Chessen said.  “This is very positive, but the fundamental story is the same:  It’s all about jobs.  When people don’t have jobs, they can’t pay their bills.  High numbers of unemployed workers and slow job growth continue to paint a picture of financial stress for many households.”