Economic signs improving as consumer loan delinquencies decline in most categories, ABA says.

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Consumer loan delinquencies fell in eight of 11 loan categories in the fourth quarter of 2009, marking the second quarter in a row of broad-based improvement, according to the American Bankers Association's Consumer Credit Delinquency Bulletin, which was released recently.

The news is a "strong indication" that the economy is on an upswing, according to ABA Chief Economist James Chessen.

"Clearly, consumers are shoring up their finances and banks are putting losses behind them. Overall, there is a prudent approach to credit," he says.

The composite ratio, which tracks eight closed-end installment loan categories, fell four basis points to 3.19 percent of all accounts compared from 3.23 percent of all accounts in the previous quarter. Bank card delinquencies fell 38 basis points to 4.39 percent of all accounts which is below the five-year average (4.52 percent). The report defines a delinquency as a late payment that is 30 days or more overdue.

In the auto loan categories, direct loan delinquencies fell 10 basis points to 1.94 percent of all accounts. Indirect auto loan delinquencies (arranged through auto dealers) remained even at 3.15 percent of all accounts.

Housing-related loans showed mixed...