The NY Federal published its latest report on Household Debt and Credit for the first quarter: the report showed total household debt increased by $18 billion, just a 0.1% increase, in Q1 2026, to $18.8 trillion.
Some details:
The volume of newly originated credit held steady in the first quarter of 2026 for both mortgages and auto loans. Mortgage originations, measured as appearances of new mortgages on consumer credit reports and including both refinance and purchase originations, were largely steady with $530 billion newly originated in 2026Q1.
About 59,000 individuals had new foreclosures on their credit reports, a slight increase from the previous quarter.
There were $182 billion in new auto loans appearing on credit reports during the first quarter.
Aggregate limits on credit cards continued to rise, with a $60 billion (1.1%) uptick in the first quarter, to ~$5.5 trillion. Home equity lines of credit (HELOC) limits rose, albeit at a slightly slower pace, by $14 billion (1.4%), continuing an expansion in HELOCs that began in 2022.
The total balance of loans delinquent at least 30 days remained unchanged at 4.8% from the prior quarter after six quarters of steady increase. Still, the overall delinquency rate matched the highest level reported since 2017. Transition into early delinquency held steady for auto loans, but ticked down for credit cards, from 8.7% annually to 8.6%, and for mortgages from 3.9% to 3.8%.
“Aggregate household debt levels rose slightly, with modest increases in most debt types offsetting a seasonal decline in credit card balances,” said Daniel Mangrum, Research Economist at the New York Fed. “Delinquency transition rates were mostly steady, while student loan delinquencies are returning to pre-pandemic levels.”
More concerning is that the percentage of loan balances that are seriously delinquent and set to transition to default/discharge continues rising - student loan delinquency rate increased to 10.3% of balances 90+ days delinquent, up from the 9.6% observed in 2025Q4 - and while it hit a new post-covid high for student loans after the Biden moratorium ended last year, the credit card picture is most dire, with the percentage there on pace to surpass the financial crisis record in the next few quarters. As shown below, transition rates into serious delinquency were mostly unchanged for auto loans and credit cards, but increased slightly for mortgages from 1.4 % annually to 1.5%. The student loan delinquency rate increased to 10.3% of balances 90+ days delinquent, up from the 9.6% observed in Q4 2025.
Some more details:
About 124,000 consumers had a bankruptcy notation added to their credit reports in 2026Q1, a pace unchanged from the previous quarter. The percentage of consumers with a third-party collection account on their credit report worsened slightly to 5.0 percent
Taking a closer look at the army of defaulting "students", the WSJ writes that millions of borrowers are defaulting on their student loans, and they are nearly 40 years old on average. That is nearly 2½ years older than the profile of a student-loan defaulter before the pandemic. Borrowers 50 and older are now at higher risk of default than younger borrowers.
Since a pandemic-era pause on student-loan repayments ended in 2023, the federal government has been pushing people to start repaying their loans. In the fourth quarter of last year, those who failed to restart payments began defaulting, meaning they hit 270 days past due on their payments. The New York Fed estimated that more than 3.5 million people defaulted between October and March.
The Fed report offers a look at who is defaulting:
The report found that Gen X borrowers, including those age 50 to 61, have the highest average student-loan balance of any age group. Many of them either reached college age as the modern federal student-loan system was forming or borrowed later, likely on behalf of their children.
Just as concerning is that in late 2024, borrowers who missed their student-loan payments saw steep drops in their credit scores for the first time in years.
The Trump administration has been revamping the federal student-loan system, emphasizing repayment. It is a reversal from the Biden administration, which pushed policies to reduce monthly payments for borrowers and get them closer to student-loan forgiveness.
The biggest consequence for defaulted borrowers is that they could have their wages, tax returns and Social Security garnished. But the Education Department has delayed its garnishment plans.
Finally, the Saving on a Valuable Education plan, or SAVE, one of the more affordable student-loan repayment plans introduced by the Biden administration, is ending, forcing millions of borrowers to transition to new plans. The new Repayment Assistance Plan, or RAP, is being introduced in July. As millions of borrowers transition out of SAVE, they will see their monthly payments increase under other income-based repayment plans. Many of them could also default on their student loans in the coming months, according to the Fed.
Source: NY Fed
Tyler Durden Tue, 05/12/2026 - 15:40Authored by Troy Myers via The Epoch Times,
A public interest law firm announced Monday it was suing Illinois over its use of race in drawing congressional maps.
The lawsuit accuses the state of violating the 15th Amendment, which prohibits government from denying a citizen the right to vote based on race, and the Voting Rights Act of 1965 in light of a recent Supreme Court ruling, which found district boundaries drawn primarily with racial considerations are unconstitutional.
The Public Interest Legal Foundation filed the lawsuit May 8 in the U.S. District Court for the Central District of Illinois after the high court’s decision in Louisiana v. Callais on April 29.
“States may not use race to allocate power,” the group’s president and general counsel, John Christian Adams, said.
The suit specifically named Illinois Gov. JB Pritzker, the Illinois State Board of Elections, and its executive director Bernadette Matthews as defendants.
None immediately responded to a request for comment from The Epoch Times.
Pritzker signed a new congressional map for his state in 2021, and he said at the time that the “Illinois Voting Rights Act of 2011 ensures redistricting plans are crafted in a way that preserves clusters of minority voters if they are of size or cohesion to exert collective electoral power. The maps signed into law today meet those requirements to adequately preserve minority representation and reflect the diversity of our state.”
The Public Interest Legal Foundation argued in the lawsuit that this statement from the governor is a direct admission to violating federal law in using race to draw districts.
Furthermore, the Illinois Voting Rights Act of 2011 illegally mandated a racial map, ordering districts to be created as crossover, coalition, or influence districts, the group said.
According to the state’s legislation, a crossover district is where majority voters vote with the racial or language minority to elect their preferred candidate.
A coalition district is where more than one group of racial or language minorities can form a coalition to elect a candidate of all of their choice. An influence district is where a racial or language minority can impact the outcome of an election even if its preferred candidate cannot be elected.
All three types of districts in Illinois require “drawing district lines to preserve deliberate racial percentages, racial majorities, and the deliberate preservation of racial influence districts,” the lawsuit read.
The public interest law firm is representing Jeanne Ives, an Illinois resident, voter, and former state legislator. Attorneys for Ives said she has seen the state’s redistricting up close and how it violates the U.S. Constitution.
The Public Interest Legal Foundation is also currently challenging California’s congressional map, using the Louisiana v. Callais decision to try to invalidate it.
Since that Supreme Court ruling, Republican-led states have leapt at the opportunity to redraw their congressional districts ahead of the midterm elections this year with the GOP’s House majority on the line.
The coast-to-coast redistricting battle has shifted further in favor of Republicans following the high court’s ruling.
On May 8, Alabama Gov. Kay Ivey signed a bill that would authorize a new primary election if a court ruled favorably on the state’s redistricting litigation. Alabama also filed an emergency appeal to the Supreme Court to rule in its case, which was granted Monday.
Tennessee already passed redistricting legislation to carve up the state’s only blue district.
Florida Gov. Ron DeSantis signed the Sunshine State’s new map into law on May 4.
A South Carolina plan for redistricting is also advancing through the state’s legislature.
Meanwhile, Virginia’s Supreme Court struck down an attempt at a new map favoring Democrats. The state has now appealed to the U.S. Supreme Court.
The Public Interest Legal Foundation’s lawsuit against Illinois and California’s maps, if successful, could tip the scales toward Republicans and set an example for other Democratic-run states.
Tyler Durden Tue, 05/12/2026 - 15:25