MNI BRIEF: US CRE, Consumer Loan Delinquencies Rising -Fed

Commercial real estate and consumer loan delinquencies have been increasing but asset quality in the U.S. banking system is generally sound, the Federal Reserve said Friday in its semiannual supervision and regulation report. Deposits have also increased in the first three months of the year after falling sharply during the regional bank crisis of March 2023, the regulator said.

The delinquency rate for consumer loans rose above 1% for the first time since the first quarter of 2020, and the delinquency rate for CRE loans increased to 0.9%, a five-year high, the report said. Overall loan growth has slowed on weaker demand and tighter lending standards, with the exception of credit card balances, which increased to a historic high at the end of 2023. "The banking system remains sound and resilient," the Fed said.