Separately, data show that the number of troubled loans backed by the government's mortgage insurance program is on the rise as economic problems mount, and lawmakers are worried that taxpayers will be stuck with the final bill.
The banking group said the delinquency rate during the fourth quarter of 2008 across multiple consumer loans increased to 3.22%. It is the highest delinquency rate since the ABA began tracking the data in the 1970s. The delinquency rate was 2.90% during the third quarter.
Job losses during were the primary reason for the rise in loan delinquencies during the quarter, says James Chessen, the ABA's chief economist.
The ABA said these credit trends are unlikely to improve before 2010.
"Job losses have really hurt the economy and will continue to inflict pain for several months," Chessen said. "The greater the losses are, the more severe an impact it has on all credit markets."
The ABA study covers direct auto, indirect auto, closed-end home equity, home improvement, marine, mobile home, personal, and recreational vehicle loans. It excludes bank credit card and education loans.
"We've seen delinquency rates across the board in consumer loans go up, and continue to go up," Bank of America Chief Executive Ken Lewis said Thursday on CNBC television. But he said "early" delinquencies, or payments missed shortly after loans are taken out, have begun to abate in a "smattering" of products at the largest U.S. bank.
At a Senate subcommittee hearing, Sen. Kit Bond, R-Mo., warned Thursday that the Federal Housing Administration is a "powder keg" waiting to explode, and said the Congress and the Obama administration shouldn't place a greater financial burden on the already strapped agency.
"The taxpayer credit card is maxed out," Bond said.
However, Housing and Urban Development Secretary Shaun Donovan told senators that the Federal Housing Administration is "unlikely to face the catastrophic losses borne in the subprime sector." That's partly because the agency didn't back loans for more expensive properties that have plummeted in value, particularly in places like California, Donovan said.
As of February, 7.2% of loans backed by the FHA were either 90 days overdue or in foreclosure, up from 5.8% last August.
The FHA became the main source of home loans to borrowers with poor credit and low down payments after the subprime lending market's collapse. It allows borrowers to take out home loans with a down payments of as low as 3.5%, compared with 20% for a typical loan that doesn't require mortgage insurance.
FHA loans are made through by banks, insured by the government and sold as mortgage backed securities by Ginnie Mae, the government's mortgage finance agency. The FHA currently backs around a third of new home loans, up from about 3% in 2006.
President Obama last month nominated longtime real estate industry David Stevens to head the FHA. Stevens is currently president and chief operating officer of Long and Foster, a Chantilly, Va., based real estate brokerage. The position requires Senate confirmation.