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The Quarterly Debt Monitor Appendix Lowell R. Ricketts Center for Household Financial Stability Federal Reserve Bank of St. Louis Introduction This appendix for the fourth issue of The Quarterly Debt Monitor updates all of the standard tables and figures contained within the initial issue of the report. The summary report presents a subset of the following figures. In contrast, the appendix provides the same figures each quarter updated with the latest data. This allows readers to follow developments for figures of interest. The label numbers of the figures in the summary report will not necessarily match those of the same figures in the appendix. The appendix is structured as follows: • Introduction – Year-over-Year Percent Change • Consumer Debt: Levels and Growth – Total Per Capita Debt in the U.S. and Largest District MSAs – Per Capita Consumer Debt, by Type – Average Consumer Debt Balance, by Type – Contributions to Total Per Capita Debt Growth, by Type – Developments in Consumer Debt, a Demographic Perspective • Consumer Debt Delinquency – Serious Delinquency Rates, by Type – Serious Delinquency Rates, a Demographic Perspective • Loan Originations, by Equifax Risk Score – Real Auto Loan Originations – Real Mortgage Loan Originations • Methodology • Definitions The following table offers a quick summary of important indicators and trends in debt levels and delinquency rates within the past year across geographic areas. The figures are rounded. 1 Year-over-Year Percent Change from 2015:Q4 to 2016:Q4 2016:Q4 United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA % Change in Per Capita Consumer Debt Total 0.4 1.5 −1.5 −0.8 0 Mortgage −0.9 −0.5 −3.5 −4.3 −1.8 HELOC −5 −11.5 −2.8 −6.8 −6.7 Auto 5.1 4 5.4 5.5 4.2 Credit Card 2.9 3.8 0.9 3.4 1.4 Student 5.3 6.7 4.8 6.6 5.6 Mortgage −0.5 −0.6 −0.1 −0.7 −0.2 HELOC 0.1 0.1 0.1 0.2 −0.2 Auto 0.4 0.6 0.5 1.2 0.1 Credit Card −0.2 0 −0.4 −0.1 −0.1 Student −0.2 0.1 0.1 −0.1 0.4 Change in Serious Delinquency Rate SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. NOTE: The change in serious delinquency rates is given as the difference in percentage points. Consumer Debt: Levels and Growth Total Per Capita Debt in the U.S. and Largest District MSAs Figure 1: Total Real Per Capita Consumer Debt 150 Index, 2003:Q1 = 100 140 130 120 110 100 2004 2006 2008 2010 2012 2014 2016 Year United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. NOTE: “Real” data are inflation-adjusted. The gray bar indicates recession. 2 St. Louis MSA Per Capita Consumer Debt, by Debt Type Figure 2A: Total Real Per Capita Mortgage Debt Index, 2003:Q1 = 100 150 130 110 2004 2006 2008 2010 2012 2014 2016 Year United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 2B: Total Real Per Capita Auto Debt Index, 2003:Q1 = 100 120 110 100 90 2004 2006 2008 2010 2012 2014 2016 Year United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 3 St. Louis MSA Index, 2003:Q1 = 100 Figure 2C: Total Real Per Capita Credit Card Debt 100 80 60 2004 2006 2008 2010 2012 2014 2016 Year United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 2D: Total Real Per Capita Student Debt Index, 2003:Q1 = 100 500 400 300 200 100 2004 2006 2008 2010 2012 2014 2016 Year United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 4 St. Louis MSA Figure 2E: Total Real Per Capita HELOC Debt Index, 2003:Q1 = 100 250 200 150 100 2004 2006 2008 2010 2012 2014 2016 Year United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Average Consumer Debt Balance, by Type Figure 3: Average Debt Balance, By Type, 2016:Q4 125 120 Thousands $ 88 90 94 93 80 39 40 33 24 25 30 25 14 16 12 15 31 29 32 31 12 5 5 5 5 5 0 Mortgage HELOC Auto Credit Card Student Debt Type United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. NOTE: All average balances are conditional on carrying that type of debt and are unadjusted for inflation. 5 Contributions to Total Per Capita Debt Growth, by Type Figure 4: Contribution to Year−over−Year Change in Total Per Capita Debt 1.5 0.4 0.4 0.5 0.6 0.4 0.5 0.4 0.2 0.2 0 0 Percent 1 1 1 0.2 0.1 0.7 0.6 0.1 0.1 0.1 −0.1 −0.1 −0.2−0.2 −0.2−0.2 −0.3 0.2 −0.6 −0.8 −1 −1.2 −1.5 −2 −2.3 −2.6 Total Mortgage Auto HELOC Credit Card Student Other Debt Type United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. NOTES: Growth in each type of debt is relative to total debt. All data labels have been rounded. 6 0.2 Developments in Consumer Debt, a Demographic Perspective Figure 5A: Year−over−Year Change in Total Debt 3.4 3 2.3 Percent 2 1.5 1.2 1 0.8 0.7 0.6 0.4 0.5 0.3 0.2 0.2 0.6 0.5 0.5 0.4 0.4 1.2 1 0.3 0.2 0.4 0.5 0.2 0.2 0.3 0 0.1 0.1 0.1 0.1 0.2 0 −0.3 −0.5−0.6 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. NOTE: Figures 5A to 5F are weighted with respect to the total by debt type. Figure 5B: Year−over−Year Change in Mortgage Debt 1.3 1.1 1 1 0.6 0.3 0.3 0.3 0.2 0.1 0.1 0.4 0.7 0.3 0.4 0.1 0.2 0.1 0.1 0.2 0.1 0.1 0 Percent −0.1 −0.1 −0.1 −0.3 −0.1 −0.4 −0.5 −0.7 −1 −1 −1.2 −1.3 −1.6 −2 −2 −2.6 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 7 St. Louis MSA Figure 5C: Year−over−Year Change in Auto Debt 8.2 8 7.4 7 6 6 Percent 5.4 4 2.1 2 1.7 1.7 1.7 1.7 1.6 1.4 1.3 1.1 1.8 2 2 1.5 0.8 0.7 1.5 1.2 1 0.9 0.9 1.2 1.2 1 0.7 0.5 0.2 0.1 0.3 0.1 0.2 0 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 5D: Year−over−Year Change in Credit Card Debt 5.7 5.3 4.8 4 Percent 3.6 2.6 2 1.7 1.6 1.3 0.8 0.6 0.6 0.7 1.4 1.3 1.3 1.3 0.9 0.9 0.7 0.7 0.2 0.4 0.2 0.8 0.8 0.5 0.5 0.4 0 1.1 0.3 0.4 0.3 0.4 0.1 −0.1 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 8 St. Louis MSA Figure 5E: Year−over−Year Change in Student Debt 8.7 8.6 7.6 7.5 7.2 Percent 6.8 5.0 3.6 3.1 2.5 2.5 2.9 2.6 2.3 3.4 2.9 2.8 2 1.4 1.2 1.4 0.7 1 0.9 0.7 0.5 0.3 0.2 0.6 0.3 0.3 0.5 0.3 0.0 <31 31−40 41−55 56−65 66−75 0.1 0 0 0.2 0.1 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 5F: Year−over−Year Change in HELOC Debt 3.1 2 0.7 0 0.1 0.2 0 0 −0.2 1.1 1.3 0.9 0.1 −0.2 −0.8 −0.3 −0.3−0.5−0.1 −0.6 −1.2 −0.4 −1.1 Percent −1.6 −0.2 −1.9 −2.7 −3.2 −3.8 −3.2 −3.3 −4.6 −5 −5.1 −5.6 −6.9 −9.8 −10 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 9 St. Louis MSA Consumer Debt Delinquency Serious Delinquency Rates, by Type Percent of Outstanding Balance Figure 6A: Serious Delinquency Rates for United States, By Debt Type 10 5 0 2004 2006 2008 2010 2012 2014 2016 Year Auto Mortgage Student Credit Card HELOC SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 6B: Serious Delinquency Rates, By Debt Type Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA Percent of Outstanding Balance 15 10 5 0 15 10 5 0 2004 2006 2008 2010 2012 2014 2016 2004 2006 2008 2010 Year Auto Mortgage Student Credit Card SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 10 HELOC 2012 2014 2016 Serious Delinquency Rates, a Demographic Perspective Figure 7A: Serious Delinquency Rate for Mortgages, By Age 1.6 1.5 1.5 1.3 Percent 1.1 1.0 0.9 0.7 0.7 0.6 0.5 0.4 0.5 0.4 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0 0 0 0 0.3 0.1 0.1 0.1 0.1 0.2 0 0 0 0.1 0 0 0 0.0 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. NOTE: Figures 7A to 7E are weighted with respect to the total by debt type. Figure 7B: Serious Delinquency Rate for Auto Loans, By Age 6 6 4.3 4 Percent 3.5 3.4 2.9 2 1.8 1.7 1.4 1.2 1 0.8 1.1 0.9 0.6 0.6 0.7 0.8 1.3 1 0.9 0.7 0.4 0.4 0.4 0.6 0.3 0.2 0.2 0.3 0.1 0.1 0.1 0.1 0.2 0.1 0 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 11 St. Louis MSA Figure 7C: Serious Delinquency Rate for Credit Card Loans, By Age 7.1 7 6.9 6.2 6 Percent 5.4 4 2.6 2.5 2.3 2 2 1.7 1.4 1.2 0.7 0.9 0.9 1.3 1.1 1.2 1.1 1 1.1 1.4 1.2 0.7 0.7 0.7 0.7 0.5 0.4 0.4 0.5 0.5 0.6 0.4 0.6 66−75 75+ 0 <31 31−40 41−55 56−65 All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA St. Louis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 7D: Serious Delinquency Rate for Student Loans, By Age 14.9 15 14.1 13.3 12.6 11.5 Percent 10 5.3 5 4.2 3.7 3.2 2.7 4.7 5 3.8 4.2 3.5 3.9 4.3 4.2 4.3 2.8 1.1 0.8 1.1 1 0.8 0.2 0.2 0.1 0.3 0.3 0.2 0.1 0.1 0.2 0.1 0 <31 31−40 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 12 St. Louis MSA Figure 7E: Serious Delinquency Rate for HELOC Loans, By Age 1.7 1.6 1.5 Percent 1.5 1.0 0.9 0.7 0.6 0.6 0.5 0.5 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0 0.0 0 0 0 0 0 <31 0.6 0.5 0.5 0.5 0 0.1 0.2 0.1 0.1 0 0 31−40 0.2 0.1 0 41−55 56−65 66−75 75+ All Ages Age Group United States Little Rock MSA Louisville MSA Memphis MSA SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 13 St. Louis MSA Loan Originations, by Equifax Risk Score Real Auto Loan Originations Billions 2009 $ Figure 8A: Auto Loan Originations, By Equifax Risk Score, United States 100 50 0 2004 2006 2008 2010 2012 2014 2016 Year 280−619 620−659 660−719 720−759 760−850 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. NOTES: For inflation adjustment, 2009 dollars are used, in line with the Bureau of Economic Analysis’ personal consumption expenditures chain-type price index. Equifax developed the score to measure lending risk. Typically, credit scores below 620 are considered subprime. A score below 500 would qualify as deep subprime. These lower scores indicate that the borrower is more likely to have problems repaying the loan. 14 Figure 8B: Auto Loan Originations, By Risk Score, Little Rock MSA Millions 2009 $ 400 300 200 100 0 2004 2006 2008 2010 2012 2014 2016 Year 280−619 620−659 660−719 720−759 760−850 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 8C: Auto Loan Originations, By Risk Score, Louisville MSA Millions 2009 $ 400 300 200 100 0 2004 2006 2008 2010 2012 2014 Year 280−619 620−659 660−719 720−759 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 15 760−850 2016 Figure 8D: Auto Loan Originations, By Risk Score, Memphis MSA Millions 2009 $ 600 400 200 0 2004 2006 2008 2010 2012 2014 2016 Year 280−619 620−659 660−719 720−759 760−850 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 8E: Auto Loan Originations, By Risk Score, St. Louis MSA Millions 2009 $ 1500 1000 500 0 2004 2006 2008 2010 2012 2014 Year 280−619 620−659 660−719 720−759 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 16 760−850 2016 Real Mortgage Loan Originations Figure 9A: Mortgage Originations, By Equifax Risk Score, United States Billions 2009 $ 100 50 0 2004 2006 2008 2010 2012 2014 2016 Year 280−619 620−659 660−719 720−759 760−850 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 9B: Mortgage Originations, By Risk Score, Little Rock MSA Billions 2009 $ 0.3 0.2 0.1 0.0 2004 2006 2008 2010 2012 2014 Year 280−619 620−659 660−719 720−759 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 17 760−850 2016 Figure 9C: Mortgage Originations, By Risk Score, Louisville MSA Billions 2009 $ 0.6 0.4 0.2 0.0 2004 2006 2008 2010 2012 2014 2016 Year 280−619 620−659 660−719 720−759 760−850 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. Figure 9D: Mortgage Originations, By Risk Score, Memphis MSA Billions 2009 $ 0.6 0.4 0.2 0.0 2004 2006 2008 2010 2012 2014 Year 280−619 620−659 660−719 720−759 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 18 760−850 2016 Figure 9E: Mortgage Originations, By Risk Score, St. Louis MSA Billions 2009 $ 1.5 1.0 0.5 0.0 2004 2006 2008 2010 2012 2014 Year 280−619 620−659 660−719 720−759 SOURCE: Federal Reserve Bank of NY/Equifax Consumer Credit Panel. 19 760−850 2016 Methodology The Federal Reserve Bank of New York/Equifax Consumer Credit Panel consists of Equifax credit report data for a longitudinal quarterly panel of individuals from 1999 to the present. Due to reporting irregularities prior to 2003, we restrict our sample so that it begins in the first quarter of 2003. The panel is a nationally representative 5 percent random sample of all individuals with a Social Security number and a credit report. Thus, our analysis excludes debt held by individuals without Social Security numbers. We use only data for individual consumers, but the sample also includes all other individuals living at the same address as the primary sample members. The resulting database includes a maximum sample of over 44 million individuals in each quarter. The Consumer Credit Panel offers a variety of variables for several important consumer debt categories: • For mortgage debt, we combine balances for first mortgages and home equity installment loans. • We put home equity lines of credit (HELOC) in a separate debt category because HELOC is a revolving line of credit that may fluctuate depending on when the homeowner chooses to borrow. • Auto debt is the sum of all loans taken out to buy an automobile; these loans include those financed by a banking institution, as well as those financed by dealerships or auto financing companies. • Credit card debt is the balance for all revolving accounts for banks, bankcard companies, national credit card companies, credit unions, and savings and loan associations. • Student loans include all loans used to finance education expenses; the loans are provided by banks, credit unions and other financial institutions, as well as by federal and state governments. • An “other” category includes consumer finances (sales financing, personal loans) and retail (clothing, grocery, department stores, home furnishings, gas, etc.) loans. This category represents a very small share of total debt, and its varied components inhibit useful interpretation of trends. For that reason, it is not included on most of the figures. To reduce computing requirements, we use a 2 percent subsample for all national estimates and figures. For all regional analysis, we use the entire 5 percent sample in order to maximize the sample size available for smaller geographic areas. While estimating individual total balances, we avoid double counting by attributing 50 percent of the balance associated with each joint account to each individual. Aggregate debt totals are calculated by multiplying estimated figures by 20 = (1 /.05) for the regional analysis and by 1,000 = (1/ (.05 *.02)) for the nation. All debt figures, with the exception of average debt balance, are adjusted for inflation using the personal consumption expenditures chain-type price index, with a base year of 2009. Analysis of regional MSAs uses the July 2015 definitions set forth by the Office of Management and Budget. 20 Definitions Total Debt Balance: Total balance across all accounts, excluding those in bankruptcy. Average Balance: All average balances are conditional on carrying that type of debt. For example, average student debt pertains to the average balance among individuals who have a student loan. Also, average debt balances are reported unadjusted for inflation. This was done to make those balances more relatable to a reader’s personal financial obligations. Equifax Risk Score: Predicts the likelihood of a consumer becoming seriously delinquent (90-plus days past due on debt). The score ranges from 280 to 850, with someone with a higher score being viewed as a better risk than someone with a lower score. Serious Delinquency Rate: The share of debt that has a payment at least 90 days past due, divided by the total outstanding balance for that type of debt. Debt at least 90 days past due includes: • Debt categorized as 90 days late–between 90 and 119 days late with not more than four payments past due; • 120 days late–at least 120 days past due with five or more payments past due; • In collections; and • Severely derogatory–any of the previous states combined with reports of a repossession, charge-off to bad debt or foreclosure. The total outstanding balance includes debt at least 90 days past due in addition to: • Debt which is current or paid as agreed; • 30 days late–between 30 and 59 days late with not more than two payments past due; and • 60 days late–between 60 and 89 days late with not more than three payments past due. Not all creditors provide updated information on payment status, especially after accounts have been derogatory for a longer period of time. Student Loan Reporting Issues: There are some reporting issues related to student loans in the raw Equifax data. This involves a temporary or sustained period of nonreporting of student loan accounts. We leave the data as they were provided by Equifax. Auto Loan Originations: In calculating the balance of new auto loan originations, we use both the number of accounts and total balance on an individual credit report in consecutive quarters. New auto loan originations are then defined as an increase in the balance accompanied by an increase in the number of accounts reported. 21