S & P Reports Consumer Credit Defaults Drop in May

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According to data released today by Standard & Poor's and Experian for the May 2010 S&P/Experian Consumer Credit Default Indices, show that the monthly default rates declined for all five credit lines, bank card default rate declined for the first time since December 2009.

Defaulting balances of bank card loans were 8.9% in May, down from 9.1% in April and down 8.0% from a year earlier. First and second mortgage default rates were 3.4% and 2.4% respectively, both down from the prior month's levels. Auto loan defaults were 1.8% in May, down from 1.9% in April.

"Default rates nationally fell in May across the board. Defaults were also down on the five major cities with Miami showing the largest declines" comments David M. Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor's. "The declines reflect continuing efforts by consumers to bring their debt levels down following the financial crisis and recession.  Data from the Federal Reserve confirm a general pull back from many forms of debt.  This is part of what may be a long term process of re-establishing consumer financial stability."

Consumer credit defaults vary across major cities and regions of the U.S. Among the five major Metropolitan Statistical Areas reported each month in this release, New York showed the smallest decrease of 23.85% in the past year. The sharpest decline was in Miami where defaults have declined 50.84% in the last 12 months and 4.45% in the past month.

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