Borrower defaults for Wells Fargo have begun to creep up from their pandemic lows, as financial conditions return to normal, says the bank’s chief executive, Charles Scharf.
“We would say the bottom has been reached,” he said at a banking conference, according to CNBC.
Wells Fargo is seeing “very, very small amounts of delinquency increases,” he said, calling them “nothing meaningful, but just slightly different than we would have seen last quarter.”
When it comes to households, their debt continues to rise, to $15.24 trillion in the third quarter. That's up 1.9%, or $286 billion, from the second quarter, the New York Federal Reserve Bank said last month.
The total debt balance is now $1.1 trillion higher than it was at the end of 2019 prior to the Covid pandemic.
It is also $890 billion higher than it was in the third quarter of 2020, and $2.57 trillion higher, in nominal terms, than the $12.68 trillion of 2008.
Mortgage balances — the largest component of household debt — climbed by $230 billion to $10.67 trillion in the third quarter from the second quarter. Student loan balances rose $14 billion to $1.58 trillion.
Mortgage originations, which include mortgage refinancings, registered $1.1 trillion in the third quarter, down from the series high of $1.2 trillion in the second quarter.
Auto-loan balances increased by $28 billion in the third quarter from the second quarter, to $1.44 trillion.
Credit-card balances gained $17 billion, matching the second quarter increase, to $800 billion.
Still, credit-card balances remain $123 billion below the end of 2019.