Dec 11, 2012 Walt Wojciechowski
InsideARM recently reported that the latest Charge-Off and Delinquency Rates on Loans and Leases at Commercial Banks reports from the Federal Reserve for the third quarter showed improvements in nearly every segment of the consumer credit industry. According to the news provider, consumer credit card delinquencies dropped from 2.9 in the second quarter of this year to 2.83 percent last quarter, marking the best reading since 1991. The one poor point in the reports regarded mortgage delinquencies, which increased from 10.54 percent in the second quarter to 10.77 percent in the third. This is the highest number of the year, and close to the records seen following the housing crisis in 2010, boding poorly for debt collectors and risk managers alike. However, while mortgage delinquencies have risen incrementally over the past several quarters, all other consumer loans have dropped consistently since the first quarter of 2010. Now, with late payments on loans dropping to historic levels - as they are the lowest they have been since the Fed began tracking such data - debt collectors have an opportunity to seek out outstanding loans and other dues. Credit risk management a matter of foresight
Some of the better studies and research provide insights that indicate where the national economy will be several months down the road. Credit risk managers need to seek out data and look at the trends over a long stretch of time to ensure their information yields sound business decision-making among executives. If these professionals do not feel entirely comfortable with the task, they should hire a firm that does.