![]() This could be one contributing factor to El Paso’s more dramatic increase than the national average. El Paso residents, who are often seasonal laborers in the Permian Basin, may have become insolvent following layoffs due to the slowdown in the energy sector. “While growing auto loan delinquency rates in El Paso reflect a national trend, there could be a regionally specific motive for increased defaults on car payments. According to Keighton Allen, senior research analyst at the Dallas Fed’s El Paso Branch, El Paso is home to such workers who commute to the oil-producing Permian Basin, sometimes for weeks at a time: Oil bust: From 2015 to 2016, oil prices declined, affecting economic prospects for those who worked in that industry.There are some possible explanations for this increase: In actual percentages, El Paso’s seriously delinquent auto debt rate was still under 5 percent by the end of 2018-while other counties’ approached 6 percent-but the rate of change since 2014 has been quite large ( Chart 3). In fact, the share of car debt that is seriously delinquent has more than doubled since 2006. While an 8 percent increase in 12 years may not seem particularly noteworthy, this balance growth is coupled with a rapidly rising serious delinquency rate. In El Paso, however, average balances grew 8 percent, from about $21,700 in 2006 to nearly $23,400 in 2018. Of those who have car loans, average balances in real terms have remained somewhat steady since 2006 in Dallas, Bexar, Harris and Travis counties-in some cases growing a few hundred dollars, and in other cases actually falling, adjusting for inflation. However, in the past two years, late payments have begun to tick up in El Paso, and the delinquency rate is now the highest of the five counties.Īs of 2017, an estimated 93 percent of households in El Paso County have at least one vehicle, a figure that is similar across Texas. ![]() As noted in the statewide report, the passage of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act resulted in a decline of serious delinquencies through 2016. ![]() During the Great Recession, serious delinquencies rose sharply in El Paso, peaking at nearly 15.5 percent at the start of 2010 ( Chart 2). Credit Cardsįrom 2003 to 2007, the rate of seriously late payments on credit cards in El Paso was below the state average for Texas and lower than other large counties with the exception of Travis. In recent years, El Paso residents have struggled with late payments on multiple loan types, although it is not historically the county with the highest serious delinquency rates. In addition, the Border Region Modeling Project publishes a refereed technical report research series that investigates borderplex policy and development issues.This report also looks at serious delinquency rates-defined as payments at least 90 days past due-for four major loan types: credit card, mortgage, auto and student. Long-term structural trend projections generated with the model are also periodically published. ![]() Short-term cyclical forecasts generated using the model are published every year during the fourth quarter. Sectoral coverage provided by the model includes demography, employment, personal income, retail sales, residential real estate, transportation, international commerce, water consumption, and cross border manufacturing. Geographic coverage provided by the model encompasses El Paso, Texas Ciudad Juárez, México Chihuahua City, México and Las Cruces, New Mexico. Tom Fullerton, the Border Region Modeling Project houses the 250-equation Borderplex Econometric Forecasting Model. The Border Region Modeling Project is an independent research unit within the Department of Economics & Finance at the University of Texas at El Paso.
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