Bank investors should start paying attention
Consumers have been ramping up debt in the U.S., adding a potential new risk to banks and a weight on the economy.Since the financial crisis, mortgage lending has been hogtied with new regulations that make it more difficult, especially for young or subprime borrowers, to get home loans. But other forms of consumer credit, including auto, student and credit card loans, have been growing strongly in recent years, helping boost retail spending, a major driver of economic growth.
Last week, data from the Federal Reserve showed that balances have now topped $1 trillion for all three of these consumer debt categories. Credit cards breached that threshold in February, joining auto and student loans above that level. Credit card debt rose to the highest level since January 2009.
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