-
-
-
The mission of the Applied Macroeconomics and Econometrics Center (AMEC) is to provide intellectual leadership in the central banking community in the fields of macro and applied econometrics.
The Center for Microeconomic Data offers wide-ranging data and analysis on the finances and economic expectations of U.S. households.
The monthly Empire State Manufacturing Survey tracks the sentiment of New York State manufacturing executives regarding business conditions.
-
-
-
The Governance & Culture Reform hub is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.
Need to file a report with the New York Fed? Here are all of the forms, instructions and other information related to regulatory and statistical reporting in one spot.
The New York Fed works to protect consumers as well as provides information and resources on how to avoid and report specific scams.
-
-
-
The New York Fed provides a wide range of payment services for financial institutions and the U.S. government.
The New York Fed offers the Central Banking Seminar and several specialized courses for central bankers and financial supervisors.
The New York Fed has been working with tri-party repo market participants to make changes to improve the resiliency of the market to financial stress.
-
-
-
We are connecting emerging solutions with funding in three areas—health, household financial stability, and climate—to improve life for underserved communities. Learn more by reading our strategy.
The Economic Inequality & Equitable Growth hub is a collection of research, analysis and convenings to help better understand economic inequality.
This Economist Spotlight Series is created for middle school and high school students to spark curiosity and interest in economics as an area of study and a future career.
The Governance & Culture Reform hub is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.
-
March 5, 1999
NOTE TO EDITORS
The latest issue of the New York Fed’s Current Issues in Economics and Finance --Meet the New Borrowers-- is enclosed for your review.
Credit card write-offs have risen sharply in recent years, suggesting that lenders are reaching out to riskier borrowers, according to authors Sandra Black and Donald Morgan, economists in the Banking Studies area of the Bank.
Black and Morgan document that the share of U.S. households with a credit card rose nearly 11 percentage points (roughly 20 percent) between 1989 and 1995. Not coincidentally, perhaps, banks also began to write off more credit card loans in 1995. By 1997, banks were charging off bad credit card loans at the highest rate in twenty-five years.
While the rise in credit card write-offs may have started in 1995 with the mild slowdown in U.S. job growth, the fact that these bad loans continued to mount even after job growth rebounded implies that lenders have been offering cards to individuals who have a greater likelihood of delinquency, the authors state.
Black and Morgan investigate how the personal, demographic, and economic profile of the typical cardholder has changed in recent years and identify the changes in the profile that seem most important in explaining heightened risk in the credit card market.
The authors find that:
- Compared with their 1989 counterparts, cardholders in 1995 owe more, relative to income. The strong link observed between debt burdens and delinquency rates suggests that higher debt burdens are the most important factor behind the rise in charge-offs.
- Another important factor is the changing occupational mix of cardholders: the 1995 borrowers are more likely to work in relatively unskilled blue-collar occupations. Delinquency rates are higher for these workers, perhaps because their income is more closely tied to the business cycle.
- Characteristics such as marital status, job tenure, and a willingness to borrow for riskier purposes were less important in explaining the rise in charge-offs.
Contact: Douglas Tillett
