With most of the large banks reporting earnings this week one trend has become clear; as the loan books have grown delinquencies have not grown as fast; this is due to the strong economy and also the focus on prime consumers; those more risky borrowers are simply not able to obtain a bank loan today; severely delinquent consumer loans at Wells Fargo have dropped for 22 quarters in a row, at Bank of America it is 23 quarters in a row; many bank CEOs opined on the strength of the US consumer but they were really only talking about prime consumers; those banks that did venture into the near-prime or subprime consumer have shut down these lending programs with PNC Financial Services Group CEO Bill Demchak saying on their earnings call this week, “We aren’t a subprime lender. We don’t understand it. We don’t want to be that person.” American Banker
