U.S. Marketplace Consumer Loan ABS Indices: June 2024

June remittance reports showed weaker month-over-month (MoM) credit performance in marketplace consumer loan pools, exhibiting higher annualized net losses and delinquency rates in both KBRA’s Tier 1 and Tier 2 indices. However, we note that Tier 2 net losses and delinquencies have receded from levels observed in Q4 2023 and improved 112 basis points (bps) and 8 bps year-over-year (YoY), respectively (see Figure 1 and Figure 2). Current index values as well as MoM and YoY changes are presented in the table below.

With tax season in the rearview mirror and summer spending beginning to weigh on consumer balance sheets, annualized net losses and delinquency rates are expected to move slightly higher in the near term. However, many issuers tightened underwriting criteria in 2022 and 2023, which should contribute to improved performance over the medium to longer term, particularly if inflation continues to cool.

The data shown in this report and other indices metrics can be found