Monthly Overview
May’s remittance reports for our U.S. Marketplace Consumer Loan ABS Index showed a third consecutive sharp reversal of the credit performance seen in the preceding month. Annualized net loss and 30+ day delinquency rates declined by 328 basis points (bps) and 183 bps month-over-month (MoM), respectively. This reversal once again offsets the prior increase in these metrics observed in April. Meanwhile, both credit metrics improved compared to year-ago levels, with net losses down 183 bps year-over-year (YoY), landing at 12.04%, and the delinquency rate falling 9 bps to 5.34%.
The main driver of this volatility seen over the last three months is the shorter day count during the February collection period (March remittance). This pushed some February loan charge-offs into March collections (April remittance), leading to lower net losses in the February remittance and higher net losses in the April remittance. A similar trend occurred in 2023 (see Figure 1 and Figure 4),…