NEW YORK (MNI) – The following is the text of a statement by the
New York Federal Reserve Bank Thursday on latest report on household
credit and debt:

In its latest Quarterly Report on Household Debt and Credit, the
Federal Reserve Bank of New York today announced that student loan debt
reported on consumer credit reports reached $904 billion in the first
quarter of 2012, a $30 billion increase from the previous quarter. In
addition, consumer deleveraging continued to advance as overall
indebtedness declined to $11.44 trillion, about $100 billion (0.9%) less
than in the fourth quarter of 2011. Since the peak in household debt in
the third quarter of 2008, student loan debt has increased by $293
billion, while other forms of debt fell a combined $1.53 trillion.

The NY Fed also released historical student loans figures, by
quarter, dating back to the first quarter of 20031 as part of this
quarters report. These data show that student loan debt has
substantially increased since 2003, growing $663 billion. Outstanding
student loan debt surpassed credit card debt as the second highest form
of consumer debt in the second quarter of 2010.

“Student loan debt continues to grow even as consumers reduce
mortgage debt and credit card balances,” said Donghoon Lee, senior
economist at the NY Fed. “It remains the only form of consumer debt to
substantially increase since the peak of household debt in late 2008.”

Additionally, 90+ day delinquency rates for student loans steadily
increased from 6.13% in the first quarter of 2003 to its current level
of 8.69%. They remain higher than that of mortgages, auto loans and home
equity lines of credit (HELOC).2 90+ day student loan delinquencies were
at their peak during the third quarter of 2010 at 9.17 percent and are
the only form of those delinquencies to increase this quarter (by
0.24%).

The NY Fed’s latest Quarterly Report on Household Debt and Credit
also includes data on mortgages, credit cards, auto loans and
delinquencies.

Other highlights from the report include: Mortgage balances shown
on consumer credit reports fell again ($81 billion or 1.0%) during the
quarter. Mortgage originations, which we measure as appearances of new
mortgages on consumer credit reports, rose to $412 billion and are 17.4%
below their first quarter 2011 level. Credit card balances, at $679
billion, were 21.6% below their fourth quarter 2008 peak of $866
billion.

The number of credit inquiries within six months an indicator of
consumer credit demand declined slightly, 0.5%, and is now 15.5% above
its first quarter 2010 trough. Auto loan originations rose 2.1% in the
quarter, to $72 billion, and are 43.6% above their trough level in
quarter one of 2009. About $1.06 trillion of consumer debt is currently
delinquent, with $796 billion seriously delinquent (at least 90 days
late or “severely derogatory”).

** MNI **

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