, car loans and unsecured lines of credit have either returned to, or slightly surpassed, pre - pandemic levels. and some households look to be relying more on credit cards : the share of accounts with utilization rates above 90 % has been increasing. delinquency rates on mortgages, meanwhile, are still lower than before the pandemic. 4 and, to date, households with mortgages are showing only a modest increase in financial stress related to their non - mortgage debt. for businesses, the pace of credit growth has also slowed. and, as with households, the slowdown appears to be mainly driven by demand. 5 many businesses have seen their debt - servicing costs rise at the same time as their revenue growth has been slowing. however, the data suggest most can still service their existing debt, and while business insolvencies have risen in almost all industries, they are still largely in line with levels seen before the pandemic. 6 the banking sector is also adjusting. as interest rates have risen, banks have raised the rates they pay on term deposits, with one - year rates for guaranteed investment certificates reaching above 5 % - their highest level in more than 20 years. depositors 3 / 5 bis - central bankers'speeches have reacted by shifting money from demand deposits into higher - paying term deposits. this is good news for savers, but it also means higher funding costs for banks. and higher funding costs are typically passed on to borrowers. banks are also keeping larger capital and liquidity buffers than before the pandemic and putting more cash aside to deal with potential credit losses. this helps them prepare for the effects of a slowing economy and is exactly the sort of proactive adjustment we'd expect to see. the adjustment still to come that's the story so far. but more adjustment is coming. a key area we're watching is high levels of fixed - payment mortgage debt. in all, around 40 % of mortgage holders have seen higher payments since early 2022. by the end of 2026, virtually all remaining mortgage holders will go through a renewal cycle and, depending on the path for interest rates, may face significantly higher payments. in combination with credit stress indicators, our consumer surveys help us gauge how canadians are adjusting, or planning to adjust, to higher payments. many respondents say their mortgage payments are close to or greater than the maximum they could handle without cutting other spending. 7 and most say they think the impact of

the preservation of the community bank model for future generations of americans. community banks understand their borrowers and their specific needs. while technology continues to evolve and change the way we live and bank for the better, it still cannot by itself fulfill that unique and vital role. today, there are more than 4, 800 community banks in the united states. 2 nearly 80 percent of these have assets totaling less than $ 500 million, with roughly 40 full - and part - time employees, on average. the vast majority of these community banks are financially strong, and are the backbone of the towns and cities they serve, providing loans to individuals and businesses in the local area. but as customers ’ needs and goals evolve, community banks will need to evolve to meet them. the successful integration of financial technology into the community bank business model is proving to be enormously valuable to enable community banks to enhance the services they ’ ve already proven they can deliver effectively. access to technology and services to meet customer needs is critical to ensuring community banks remain vibrant. for the remainder of my remarks, i will focus on my vision for creating pathways to responsible community bank innovation. in particular, i will discuss the promise and the challenges that smaller banks face in identifying, integrating, and deploying transformative new technologies, and i will offer some ideas for how the federal reserve can help community banks find and manage their relationships with service providers. clearing a path for innovation community banks have always been innovators, but rapid technology adoption is challenging for banks of all sizes. in most cases, realizing the potential that technology offers requires community banks to obtain services from other companies or products from core service providers, which i will refer to collectively as third - party providers. as i noted earlier, banks with less than $ 500 million in assets employ roughly 40 people on average — nowhere near the number required to exhaustively develop, test, and manage every element of novel technologies. in my discussions with bankers, they note that the process of selecting, initially vetting, and continuing to evaluate third - party service providers is onerous and presents obstacles to successful innovation. i agree that the cost of complying with some of our regulations and expectations for third - party relationships can pose an outsized and undue burden on smaller banks. these compliance 2 / 6 bis central bankers'speeches costs are in some instances disproportionate to bank size, complexity, risk, and capacity and can be the same for a bank with $ 10 million in assets