Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, December 22, 1994                   TAG: 9412220089
SECTION: BUSINESS                    PAGE: B-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                  LENGTH: Medium

LOANS PAID - ON TIME

The American Bankers Association said bank consumer-installment loans that were more than 30 days delinquent dipped to 1.66 percent during the July-September period, down from 1.71 percent during the second quarter and 1.95 percent a year earlier.

The association said it was the 10th straight decline. The level was the lowest since it began reporting seasonally adjusted composite ratios for various types of closed-end installment loans in October 1974.

The improvement occurred as Americans were boosting the amount of their installment credit at double-digit annual rates in July, August and September.

``The low delinquency ratio is the result of three things happening in the economy,'' said association economist James Chessen. ``First, consumer balance sheets continue to be solid. Second, banks have taken losses on bad loans from the past. And, third, banks are adding new, high-quality consumer loans to their books. The bottom line is more credit for consumers.''

The association said the pace of consumer buying could accelerate further in the fourth quarter, prompting a word of caution from Chessen. ``With double-digit increases in consumer lending, it is hard to imagine that the delinquency ratio will continue to drop.''

The delinquency ratio remained above 2 percent during much of the 1980s. It did not fall below 2 percent until the third quarter of 1993 - more than two years after the recession ended - when it slipped to 1.95 percent.

The composite ratio includes two types of auto loans, personal loans, recreational-vehicle loans, mobile-home loans, property-improvement loans, second mortgages and marine loans.