Loan Delinquency Rates Head Higher

With consumer debt at a record level, banks say borrowers are falling behind on repaying loans and bankruptcies are on the rise.

The Federal Reserve said Tuesday that banks reported in a quarterly survey that slower economic growth also is contributing to a higher loan delinquency rate.

Loan officers at 33 of 54 banks questioned said consumer loan delinquency rates have risen over the past year. Most said the increase was expected, given a slowing economy and rapidly rising lending.

The Federal Reserve reported two weeks ago that consumer borrowing rose by $5.4 billion at an annual rate in September, the 28th straight advance. But the report also showed that the buildup in debt is slowing.