The total loan delinquency rate at U.S. commercial banks is 1.48%. That number is below the 10-year average. It sounds reassuring. It should not be.
The aggregate rate is a weighted average of dramatically different stories. Credit card delinquency sits at 2.94% -- more than double the business loan rate of 1.34%. Consumer loans are at 2.62%. CRE is at 1.58%. The spread between the highest and lowest category is 1.60 percentage points.
When you look at the total and see 1.48%, you are looking at an average of a consumer sector under moderate stress, a business sector quietly deteriorating, and a CRE sector grinding toward a reckoning. No single category is at 1.48%. The average describes nothing real.
The mix of loans on bank balance sheets determines what the aggregate means. If consumer lending (higher delinquency rates) grows as a share of total loans, the aggregate rises even if no individual category is getting worse. If banks shift toward lower-risk lending (insured mortgages), the aggregate falls while underlying conditions may be unchanged.
In the current environment, mortgage delinquency is suppressed by locked-in low rates, pulling the aggregate down. CRE delinquency is rising, pushing it up. These forces roughly offset, producing a stable-looking total that conceals both strength (mortgages) and weakness (CRE, credit cards).
The total rate has declined in 3 of the last 4 quarters. That improvement is driven almost entirely by consumer credit: both credit card delinquencies (down from 3.08% to 2.94%) and consumer loans (down from 2.76% to 2.62%) improved year-over-year.
Meanwhile, business loans moved the other direction: up from 1.27% to 1.34%. CRE also ticked higher. The total looks stable because improving consumer metrics are offsetting worsening commercial metrics.
This is a common pattern at inflection points. In late 2006, the total delinquency rate was 1.51% -- roughly flat. But within that number, real estate delinquencies were already climbing while consumer categories were still improving. The aggregate did not signal the approaching crisis until it was already underway.
Stop watching the total. Watch the components. Specifically:
The total is the weighted average of these components:
| Loan Category | Current | Prior Qtr | QoQ Change | Year Ago | YoY Change |
|---|---|---|---|---|---|
| All Loans | 1.48% | 1.49% | -0.01pp | 1.53% | -0.05pp |
| Business Loans | 1.34% | 1.33% | +0.01pp | 1.27% | +0.07pp |
| Commercial Real Estate | 1.58% | 1.56% | +0.02pp | 1.56% | +0.02pp |
| Consumer Loans | 2.62% | 2.71% | -0.09pp | 2.76% | -0.14pp |
| Credit Cards | 2.94% | 2.98% | -0.04pp | 3.08% | -0.14pp |
The all-loans delinquency rate at U.S. commercial banks is 1.48% as of Q4 2025, per FRED series DRALACBS. This is a weighted average across business, consumer, credit card, real estate, and all other loan categories.
It moved down by 0.01pp from Q3 2025. The trend is downward, with decreases in 3 of the last 4 quarters. But the components are moving in different directions -- consumer improving, business and CRE worsening.
The peak was 7.40% in Q1 2010 during the Great Recession, when real estate, business, and consumer delinquencies all spiked simultaneously.
Because it averages very different stories. Credit cards at 2.94% and business loans at 1.34% are moving in opposite directions. The 1.48% total describes neither accurately.
Credit cards at 2.94%, because they are unsecured and revolving. Business loans have the lowest rate at 1.34%.
FRED series DRALACBS. Published quarterly by the Federal Reserve Board of Governors in the Charge-Off and Delinquency Rates release covering all FDIC-insured commercial banks.