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Growing Delinquencies, Especially in Auto Loans, Can be Seen in New CUNA Report

MADISON, Wis.–Ongoing increases in delinquencies, especially in automobile loans, can be seen in the new CUNA Economic Update.

According to CUNA Chief Economist Mike Schenk, the report shows:

  • Mortgage delinquencies. With data obtained by Equifax, CUNA economists said they have found “slight upward movements” in mortgage delinquency rates.  
  • Credit card delinquencies. Bigger increases in delinquency rates relative to the cyclical low – as seen during the COVID-19 pandemic – is concerning, said Schenk.  
  • Auto loan delinquencies: Data shows a “dramatic” increase in delinquency rates among institutions such as auto financing companies. 
thumbnail_CUNA Economic Update

CUNA Forecast
 
CUNA’s economists are forecasting delinquency rates will peak at 1% by the end of 2024. Net charge-off rates are also believed to be heading towards 70 basis points, the CUNA forecast states. Schenk said both forecasts are higher than long-term norms, but only modest in comparison to the Great Recession.  

“The U.S. economy is not in recession at the moment. Experts say recessions are defined as a significant broad-based decline in economic activity that lasts for more than a couple of months,” said Schenk. “With the labor market as strong as it is, it is very difficult to say that this is a broad-based decline in economic activity.”

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