Charge-Off Rate on Consumer Loans, All Commercial Banks
CORCACBS • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
3.01
Year-over-Year Change
201.00%
Date Range
1/1/1985 - 1/1/2025
Summary
The Charge-Off Rate on Consumer Loans tracks the percentage of consumer loan balances that banks have written off as uncollectible. This metric provides critical insight into consumer credit health and potential economic stress.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
This economic indicator measures the rate at which banks are unable to collect consumer loan payments, reflecting broader economic conditions and consumer financial stability. Economists use this trend to assess credit risk, banking sector health, and potential economic downturns.
Methodology
The data is calculated by dividing the total value of charged-off consumer loans by the total outstanding consumer loan balance across all commercial banks.
Historical Context
Policymakers and financial regulators use this trend to monitor credit market conditions and assess potential systemic risks in consumer lending.
Key Facts
- Higher charge-off rates typically indicate increased financial stress for consumers
- The metric is seasonally adjusted to provide more accurate trend analysis
- Charge-off rates can vary significantly during economic recessions
FAQs
Q: What does a charge-off rate indicate?
A: A charge-off rate shows the percentage of loans banks have determined are unlikely to be collected. Higher rates suggest increased financial strain among borrowers.
Q: How often is this data updated?
A: The Federal Reserve typically updates this data quarterly, providing a current snapshot of consumer loan performance across commercial banks.
Q: Why do banks charge off loans?
A: Banks charge off loans when payments are severely delinquent, typically after 180 days of non-payment, to reflect the loan as a potential loss on their financial statements.
Q: How does this metric relate to economic health?
A: Rising charge-off rates can signal economic challenges, such as job losses or reduced consumer income, which impact loan repayment capabilities.
Q: What are the limitations of this data?
A: The charge-off rate provides a historical view and may not immediately reflect current economic conditions. It should be analyzed alongside other economic indicators.
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Citation
U.S. Federal Reserve, Charge-Off Rate on Consumer Loans, All Commercial Banks [CORCACBS], retrieved from FRED.
Last Checked: 8/1/2025