Consumers Can't Pay; Banks Suffer

It's hardly a surprise that consumer loan delinquencies are on the rise. What do banks and credit card companies expect consumers to pay with when job losses are at an all time high?

Still, today's numbers are striking: During the first quarter, the delinquency rate among eight types of closed-end installment loans rose to 3.23%, according to the American Bankers Association. This is the highest recorded increase since ABA started tracking the rate in the mid-1970s. In the fourth quarter of 2008 the rate was 3.22%.

And credit card delinquencies also moved higher, growing 4.75% in the first quarter from 4.52% in the fourth quarter last year. The percentage of all outstanding debt on credit cards hit a record high of 6.6%.

ABA defines delinquent payment as one that is more than 30 days past due. ...