U.S. consumers paying down debt, job growth needed - ABA

Oct 4 (Reuters) - U.S. consumers made progress on paying down debt in the second quarter of 2012, but sluggish job growth and the struggling economy could weigh on Americans' ability to pay back loans in the future, the American Bankers Association said on Thursday.

The group said a composite ratio made up of delinquencies in eight loan categories fell during the quarter, and bank card delinquencies dipped to an 11-year low.

But while the ABA's first-quarter report found improvement in nearly every category tracked, the latest report did not show the same broad gains.

"Consumers are saving more and borrowing less as they work to pay down debt at a faster rate," said James Chessen, ABA's chief economist.

"Slow job growth and continued uncertainty means many consumers will face challenges managing their debt going forward," he added.

The ABA report tracks late payments for bank-provided credit cards, auto loans and other consumer loans. It does not track delinquency rates for traditional mortgage payments.

The bank association defines a delinquency as a late payment that is 30 days or more overdue.

The composite ratio fell to 2.24 percent of all accounts during the second quarter, the ABA said. Bank card delinquencies, which are not part of the composite, tumbled from 3.08 percent in the first quarter to 2.93 percent, the lowest rate since 2001.

Delinquencies on auto loans arranged through auto dealers and other third parties fell from 2.41 percent to 2.23 percent. But delinquencies on auto loans from banks rose from 0.86 percent to 0.92 percent, the ABA said.

Chessen also said improvement in the housing market has not yet trickled down enough to reduce home loan delinquencies. Delinquencies in all three home-related loan categories rose.

(For the ABA's historical fact sheet on the data, please double-click:


(Reporting by Emily Stephenson, editing by Gary Crosse)

((Emily.Stephenson@thomsonreuters.com; +1-202-354-5823))