U.S. bank card delinquencies hit record high

WASHINGTON (Reuters) - Delinquencies in U.S. bank cards rose in the second quarter to 5 percent of all accounts, while delinquencies in direct auto loans showed improvement, dropping to 2.46 percent, the American Bankers Association said on Thursday.

Job losses, shorter work weeks and drops in incomes drove up consumer delinquencies during the quarter, with record highs reported in home equity loans, home equity lines of credit, and bank cards, the ABA said.

"The picture won't change until the labor market improves and the economy picks up steam. This is going to take time," said James Chessen, chief economist for the ABA.

The unemployment rate rose to 9.7 percent in August, the highest figure since 1983, and is expected to remain high into next year even as the economy recovers.

The industry group said its composite ratio of delinquencies, which tracks eight closed-end installment loan categories, hit a record high at 3.35 percent of all accounts, compared to 3.23 percent of all accounts in the previous quarter. It defines a delinquency as a late payment that is 30 days or more overdue.

But it noted a few bright spots in which delinquency rates improved: direct auto loans, indirect auto loans, and mobile home loan delinquencies.

Direct auto loans fell to 2.46 percent of accounts from 3.01 percent, while indirect auto loans fell to 3.26 percent from 3.42 percent.

"The good news is that consumers are clearly being more cautious by saving more, spending less and making great efforts to repair their balance sheets," Chessen said.

(Reporting by Karey Wutkowski, editing by Dave Zimmerman)