Charge-Off Rate on All Loans

The Federal Reserve Board's net charge-off rate on all loans and leases at insured U.S.-chartered commercial banks was 0.55% in Q2 2026. That is lower than in Q2 2025, when it was 0.6%. It is the lowest unadjusted rate since Q3 2023, when it was 0.49%.

The rate has been below its level of a year before for five quarters in a row. The Board revises past quarters without a published policy, so the newest reading can still change slightly.

A charge-off is an accounting step, not the end of collection. Banks remove a loan from their books and charge it against their loss reserves, and money they later recover on it is subtracted, so this is a net figure. The rate takes a quarter's net charge-offs as a share of average loans outstanding and multiplies by four to state it as an annual rate. The quarter's own net write-offs are about one-quarter of the published figure.

The total mixes business and household lending: home and commercial real estate loans, consumer loans, business loans, farm loans and leases. Credit unions, savings institutions and nonbank lenders are outside it, and it counts dollars, not borrowers. Bank regulators' policy sets the timing for retail loans: a loss is recorded once the bank knows of it, and no later than 120 days past due for closed-end loans or 180 days for open-end loans such as credit cards. So a quarter's charge-offs can include loans that stopped paying months earlier.

The Board also publishes a seasonally adjusted version, which removes the regular calendar pattern in charge-offs. This page uses the unadjusted table, where the fourth quarter usually prints above the third, so it compares each quarter with the same quarter a year earlier. It is not a bankruptcy measure: bankruptcy is only one reason a loan is charged off, and court filings are counted in the bankruptcy filings page. The same Fed release gives separate rates by loan type, including Credit Card Charge-Offs and Mortgage Charge-Offs.