Consumer Credit Gains in 1Q as Securitization Utilization Rates Fall

According to an S&P research note, consumer credit increased by about $40 billion in 1Q 2017 over 1Q 2016, led by non–revolving credit, which accounted for all of the gain.

The gain was led by $32 billion in student loan issuance and $8 billion in auto loans, bringing the 1Q 2017 total level of outstanding consumer credit to $3.81 trillion. Revolving credit was mostly unchanged from 4Q 2016, holding at the $1 trillion mark and remaining near the highest level since 4Q 2008.

However, S&P notes that while auto loan ABS, credit card ABS, and student loan ABS new issuance volumes are all up in 2017 on a year over year basis, securitization utilization rates continue to decline. During 1Q 2017, the percentage of underlying auto loan, credit card, and student loans securitized fell by 40bp – 50bp compared to 1Q 2016, to rates of 17.2%, 12.6%, and 12.9%, respectively. The auto loan "securitization utilization" rate had somewhat stabilized of late, although even despite robust issuance which has struggled to keep up with underlying loan growth. Meanwhile, student loan and credit card utilization rates have fallen quite a bit since the financial crisis.

Source: S&P Global Ratings, SIFMA, Federal Reserve

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