Consumer Loan Default Rates Slowing in Most U.S. Markets, Says New S&P/Experian Credit Default Index

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According to the S&P Indices and Experian for the S&P/Experian Consumer Credit Default Indices, both a measure of changes in consumer credit defaults, showed first and second mortgages default rates decreased in June to 2.02% and 1.40%, respectively, from May rates of 2.09% and 1.42%. Auto loans default rate went down from 1.34% in May to 1.29% in June; and bank cards experienced the largest decrease in June from 5.93% to 5.69%.

"Default rates are continuing to decline across major consumer credit categories," says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. "More importantly for the economy, the Federal Reserve reported that revolving credit - which includes bank cards - rose in May for the first time since 2008. Combined with the improving default experience we are seeing this is a positive sign for an economy suffering from a lack of consumer spending.  Looking at the five leading cities highlighted in this report, the lingering effects of the housing bust can be seen in the Miami where default rates remain higher than the other cities."

Consumer credit defaults varied across major cities in the U.S. Among the five major Metropolitan Statistical Areas (MSAs) reported in this release each month, Chicago experienced a large increase in default rates, from 2.37% in May to 2.59% in June. Dallas and Miami increased moderately to 1.59% and 5.41%, from 1.58% and 5.31%. New York and Los Angeles saw default rates decrease to 1.82% and 2.17% in June, from 1.94% and 2.39% in May, respectively.

The table below summarizes the June 2011 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.



The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:

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