An record number of Americans are delinquent in paying back their loans. The American Banker's Association (ABA) reports a record number of consumers were more than 30 days late on their loan payments during the first three months of 2009.
The ABA says the situation may not improve until the economy begins to recover. "The number one driver of delinquencies is job loss," said ABA Chief Economist James Chessen.
During January, February and March more than two million Americans lost their jobs, according to Chessen. Since the start of the recession in 2007, the U.S. Labor Department reports the number of unemployed Americans increased by 7.2 million.
"When people lose their jobs, there is a cascading effect that affects nearly every loan category," said Chessen.
Delinquencies on home equity loans rose to a record high of 3.5% during the reporting period, according to ABA figures. The report says about one in 20 Americans with credit cards is behind on payments.
"The unemployed may be using their credit cards to bridge the gap between jobs and the amount of money on those cards has risen dramatically. The delinquency rate won't improve until companies start hiring again," said Chessen.