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The US economy runs on the back of consumer financial health and spending. Debt delinquency, a vital measure of consumer financial health and the willingness of lenders to fund additional debt shows a marked downturn in Credit Card delinquencies and that of Consumer Loans. The levels at which delinquencies indicate a fragile consumer are 3.5% and 4.7% respectively. Despite major headlines citing a vehicle-lender’s sudden bankruptcy i.e., Tricolor and etc., consumers as of July 2025 are in better financial condition since Jan 2025 than the one would believe from media headlines. Part of the background is if one lends to undocumented immigrants who are suddenly deported, they will likely default on loans.
 

Current trends indicate consumers are gaining greater financial flexibility.
A recent summary of disturbing consumer debt stories:

Auto lender news

• Rising delinquencies: Serious auto loan delinquencies rose to nearly 3% in Q4 2024, a problem linked to high car prices and affordability.
• Increased repossessions: The Consumer Financial Protection Bureau (CFPB) reported a significant increase in third-party repossession agents for auto loans, reaching nearly 70% in 2022.
• Business focus: Ally Financial is shifting its focus back to auto lending after selling its credit card business and halting new mortgage loans.
• Market leadership: Toyota Financial Services remains the largest auto lender by outstanding loans.
• Servicemember disparity: The CFPB found that servicemembers pay higher costs when getting credit for car purchases. 

Private and subprime lender news

• Bankruptcies: Subprime lenders Tricolor Holdings and PrimaLend Capital Partners have filed for bankruptcy, raising concerns about the health of the credit market.
• Credit market stress: The bankruptcies have increased investor anxiety and prompted warnings from bank CEOs about potential hidden stress in the credit system.
• Reduced lending: Some lenders, like Automotive Credit Corp, have paused new lending, and others have closed locations due to high charge-offs and delinquencies.
• Demand for prime credit: GM Financial successfully sold $2 billion in prime auto loans to private investors, indicating strong investor demand for high-quality, low-risk assets.
• Private credit market growth: Some experts believe the private credit market could grow significantly, though some caution that it remains opaque and could pose risks if economic growth slows. 

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