Consumer Unsecured Performance Holds Strong; Young Borrowers Shed Debt

Quick Insights

• California Wildfires: Although modifications were slower to start, they now comprise the entirety of post-Wildfire Impairment increases.

• Federal Reserve Data: Households aged 18-29 saw total debt fall for the third consecutive quarter, while debt for households aged Age 30-39 declined for the first time.

• TransUnion Data: December saw credit performance in line with November’s strong trend lines across both auto and bank cards

• Consumer Unsecured: January Total Impairments fell 32 bps MoM, while 30+ Impairments fell 18 bps.

  • Cohorting by ROI Differences: Higher-income borrowers consistently yield higher ROI across vintages since 2016, with the trend strongest in the $135-200K vs. $65-85K range and growing in the $200K+ vs. $135-200K range. The pattern persists in 2023, though the Middle Range gap is less pronounced than in 2021/2022.