BofA Sees Highest Consumer Debt Delinquency Since 2017 While Spending Climbs 5%
Bank of America reports that 4.8% of U.S. consumer debt was in delinquency in Q4, the highest level since 2017, while seriously delinquent debt-to-income held at 2.5%, comparable to pre-pandemic norms. Internal data shows January consumer spending rose nearly 5% year-over-year across income brackets, fueling CEO optimism.
1. Rising Delinquency Rates
The New York Fed’s Q4 report shows 4.8% of outstanding consumer debt in delinquency, the highest since 2017, driven by upticks in mortgage and student loan transitions. Bank of America research highlights that seriously delinquent debt-to-income remains at 2.5%, in line with Q4 2019 and far below post-2008 peaks, suggesting contained credit risk.
2. Consumer Spending and Outlook
CEO Brian Moynihan cited the bank’s data indicating January consumer spending climbed nearly 5% year-over-year across income levels, supporting fee income and loan demand. This resilient spending trend underpins BofA’s optimistic outlook for 2026, as the firm balances robust consumer activity with disciplined risk management.