ATLANTA (11/23/11)--Although total consumer debt is almost back to the level it was before the recession hit, the amount of new credit issued is lagging behind the pre-recession levels by 45%, according to a new study from Equifax.
Total consumer debt in October was $2.38 billion, compared with $2.39 billion in October 2006, said the Equifax National Credit Trends Report, a monthly report based on data from more than 585 million consumers and 81 million businesses worldwide.
Bank credit card originations remained strong. The number of new bank credit cards issued from January through August totaled $514 billion. That compares with $942 billion during the same period in 2006 and represents a 25% increase over that timeframe in 2010, said Equifax. Retail credit card originations, which bottomed out during the period in 2010 at 19.7 million, rose 7% to 21 million issued for the period this year.
Michale Koukounas, senior vice president of special client services at Equifax, noted the lending industry is experiencing mixed results, depending on sector. "Bank credit card and auto lending, in particular, have consistently performed strongly this year, providing some ground for optimism, but the severe retraction within home equity lending continues to underscore the level of impact that declining home values are having on the economy."
- Home equity lending continued to retract. In 2006-2007, the total number of new home equity lines exceeded the number of total new bank credit card originations. Now it's reversed. Home equity lines opened in January-August 2011 totaled 549,000--the lowest total for that time frame in six years--compared with 2.3 million in that period in 2006.
- Consumer finance was slow to recover to pre-recession levels. The average consumer finance amount for August 2011 was $2,902--the lowest level in six years--compared with $4,133 in August 2006.
- Total new auto loans in August were $34.4 billion--about equal to August 2007's $34.5 billion.
- Student loans originated in January-August remained consistent over the past six years. In 2011, the number of loans totaled 9.5 million--the same as in 2006 and 2009. The average loan amount decreased during that same time to $3,631 in 2011 from $5,934 in 2006.
- Subprime borrowers receiving bank-issued credit cards grew dramatically--by 56% during January-August 2011 from the same period in 2010.