Senior Loan Officer Opinion Survey on Bank Lending Practices
Current Survey PDF RSS DDP
Table 1 | Table 2 | Chart data
Table 1 (PDF) | Table 2 (PDF) | Charts (PDF)
The April 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices
The April 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the first quarter of 2025.1
Regarding loans to businesses over the first quarter, survey respondents reported, on balance, tighter lending standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes.2 Furthermore, banks reported tighter or basically unchanged lending standards, and weaker or basically unchanged demand for commercial real estate (CRE) loans.
Banks also responded to a set of special questions about changes in lending policies and demand for CRE loans over the past year. For all CRE loan categories, banks reported having tightened policies related to loan-to-value ratios and debt service coverage ratios. For some CRE loan categories, banks also tightened policies related to market areas served and the length of interest-only payment periods. For office loans, banks reported having tightened all queried policies on such loans over the past year.
For loans to households, banks reported basically unchanged lending standards and weaker demand for most categories of residential real estate (RRE) loans, on balance. Banks similarly reported basically unchanged lending standards but stronger demand for home equity lines of credit (HELOCs). In addition, banks reported having tightened standards for credit card loans, while standards remained basically unchanged for auto and other consumer loans. Meanwhile, demand reportedly weakened for credit card and other consumer loans and remained basically unchanged for auto loans.
Lending to Businesses
(Table 1, questions 1—12; table 2, questions 1—8)
Questions on commercial and industrial lending. Over the first quarter, moderate net shares of banks reported having tightened standards on C&I loans to firms of all sizes.3 These responses were mixed across bank size categories.4 Meanwhile, banks reported having tightened most C&I loan terms over the same period.5 Moderate to modest net shares of banks reported smaller maximum sizes of credit lines, higher premiums on riskier loans, tighter loan covenants, tighter collateralization requirements, and more frequent use of interest rate floors for firms of all sizes. In contrast, modest net shares of banks reported having eased loan spreads over their banks' cost of funds for small firms, while leaving loan spreads for large and middle-market firms basically unchanged. The remaining terms on C&I loans were basically unchanged, on net, to firms of all sizes. Foreign banks also reported having tightened standards and most terms for C&I loans, except for loan covenants, which were left basically unchanged.
Among banks that reported having tightened standards and terms for C&I loans, major net shares cited a less favorable or more uncertain economic outlook; increased concerns about the effects of legislative changes, supervisory actions, or changes in accounting standards; the worsening of industry-specific problems; and a reduced tolerance for risk as important reasons for doing so.
Regarding demand for C&I loans over the first quarter, significant net shares of banks reported weaker demand from firms of all sizes. These responses were similar across bank size categories. In addition, a moderate net share of banks reported a decrease in the number of inquiries from potential borrowers regarding the availability and terms of new credit lines or increases in existing lines. In contrast, a modest net share of foreign banks reported stronger demand for C&I loans.
The most frequently cited reasons for weaker demand, reported by major net shares of banks, were decreased customer investment in plant or equipment and decreased customer financing needs for mergers or acquisitions.
Questions on commercial real estate lending. Over the first quarter, moderate net shares of banks reported having tightened standards for construction and land development (CLD) loans as well as loans secured by nonfarm nonresidential (NFNR) properties. Meanwhile, standards for loans secured by multifamily (MF) properties remained basically unchanged on net. These responses were mixed across bank size categories. Among large banks, significant and moderate net shares reported having eased standards for MF and CLD loans, respectively, while leaving standards for NFNR loans unchanged. In contrast, significant or moderate net shares of other banks reported having tightened standards for all CRE loan categories. Lastly, modest net shares of foreign banks reported having tightened standards for CRE loans.
Regarding demand for CRE loans, a modest net share of banks reported weaker demand for CLD loans, while demand was basically unchanged for NFNR and MF loans. These responses were mixed across bank size categories. Significant or moderate net shares of large banks reported stronger demand, while moderate net shares of other banks reported weaker demand for all CRE loan categories over the first quarter. In addition, a significant net share of foreign banks reported stronger demand for CRE loans.
Special questions on changes in banks' lending policies on commercial real estate loans over the past year. A set of special questions asked banks about changes in their lending policies for each major CRE loan category over the past year. These questions have been asked in each April survey for the past nine years. In the April SLOOS, an additional special question asked banks about changes in their lending policies for office loans over the past year.
Banks reported having tightened or left basically unchanged all the terms surveyed for each CRE loan category. The most widely reported changes in terms, cited by significant to modest net shares of banks across all CRE loan categories, were lower loan-to-value ratios and higher debt service coverage ratios. In addition, modest net shares of banks reported having shortened the interest-only periods for NFNR loans and having reduced the market areas served for MF loans. Banks reported having left all other terms surveyed basically unchanged for all CRE loan categories. Lastly, foreign banks reported having tightened or left most terms basically unchanged for most CRE loan categories.6
The most cited reasons for tightening lending policies on CRE loans over the past year, cited by major net shares of banks, were less favorable or more uncertain outlooks for CRE property vacancy rates, property prices, market rents, mortgage delinquency rates, and a reduced tolerance for risk. Additionally, major net shares of other banks cited increased concerns about the effects of regulatory changes or supervisory actions.
The survey also asked banks about the reasons for weaker or stronger demand for CRE loans over the past year. Among banks reporting stronger demand, the most frequently cited reasons, reported by major net shares of banks, were an increase in customer refinancing of maturing loans, an increase in customer acquisition or development of properties, and a decrease in the general level of interest rates. Among banks that reported weaker demand, the most frequently cited reasons, reported by major net shares of banks, were a decrease in customer acquisition or development of properties, an increase in the general level of interest rates, a less favorable or more uncertain customer outlook for rental demand, and customer borrowing shifting from their bank to nonbank sources.
In response to questions about changes in their credit policies for office loans over the past year, major to significant net shares of banks reported having tightened all queried policies for such loans, with the most widely reported changes in policies being higher debt service coverage ratios and lower loan-to-value ratios. The most cited reasons for tightening policies on office loans, cited by major net shares of banks, were a less favorable or more uncertain outlook for office property prices, market rents, vacancy rates, mortgage delinquency rates, and a reduced tolerance for risk.
Lending to Households
(Table 1, questions 13—26)
Questions on residential real estate lending.7 Banks reported having left standards basically unchanged over the first quarter for most RRE loan categories, on balance, except for non-qualified mortgage (QM) jumbo mortgages, for which modest net shares of banks reported having tightened standards.8 Similarly, banks reported that standards for HELOCs remained basically unchanged.9
Meanwhile, banks reported weaker demand, on balance, for most RRE loan categories over the first quarter. Moderate net shares of banks reported weaker demand for non-QM non-jumbo and GSE-eligible mortgages, while modest net shares of banks reported weaker demand for government, QM non-jumbo non-GSE, non-QM jumbo, and subprime residential mortgages. In contrast, modest net shares of banks reported strengthening demand for HELOCs.10
Questions on consumer lending. Over the first quarter, a modest net share of banks reported having tightened standards on credit card loans, while banks left standards basically unchanged for auto and other consumer loans, on balance. Banks reported having left most queried terms on credit card loans unchanged, except for tightening credit limits.11 Similarly, most queried terms for auto and other consumer loans remained basically unchanged on net.12
Regarding demand for consumer loans, moderate net shares of banks reported weaker demand for credit card and other consumer loans over the first quarter, while demand for auto loans remained basically unchanged.
This document was prepared by Colin Campbell, with the assistance of Jaron Berman, Division of Monetary Affairs, Board of Governors of the Federal Reserve System.
1. Responses were received from 70 domestic banks and 19 U.S. branches and agencies of foreign banks. Respondent banks received the survey on March 31, 2025, and responses were due by April 11, 2025. Unless otherwise indicated, this summary refers to the responses of domestic banks. Return to text
2. Large and middle-market firms are defined as firms with annual sales of $50 million or more, and small firms are those with annual sales of less than $50 million. Return to text
3. For questions that ask about lending standards or terms, "net fraction" (or "net percentage") refers to the fraction of banks that reported having tightened ("tightened considerably" or "tightened somewhat") minus the fraction of banks that reported having eased ("eased considerably" or "eased somewhat"). For questions that ask about loan demand, this term refers to the fraction of banks that reported stronger demand ("substantially stronger" or "moderately stronger") minus the fraction of banks that reported weaker demand ("substantially weaker" or "moderately weaker"). For this summary, when standards, terms, or demand are said to have "remained basically unchanged," the net percentage of respondent banks that reported either tightening or easing of standards or terms, or stronger or weaker demand, is greater than or equal to 0 and less than or equal to 5 percent; "modest" refers to net percentages greater than 5 and less than or equal to 10 percent; "moderate" refers to net percentages greater than 10 and less than or equal to 20 percent; "significant" refers to net percentages greater than 20 and less than 50 percent; and "major" refers to net percentages greater than or equal to 50 percent. Return to text
4. Large banks are defined as those with total domestic assets of $100 billion or more as of December 31, 2024. Other banks are defined as those with total domestic assets of less than $100 billion as of December 31, 2024. Large banks left standards for C&I loans basically unchanged while significant net shares of other banks reported having tightened standards. Return to text
5. Lending standards characterize banks' policies for approving applications for a certain loan category. Conditional on approving loan applications, lending terms describe banks' conditions included in loan contracts, such as those listed for C&I loans under question 2 to both domestic and foreign banks and those listed for credit card, auto, and other consumer loans under questions 21–23 to domestic banks. Thus, standards reflect the extensive margin of lending, while terms reflect the intensive margin of lending. With respect to C&I loans, banks were asked about the costs, maximum size, and maximum maturity of credit lines; spreads of loan rates over the bank's cost of funds; premiums charged on riskier loans; terms on loan covenants; collateralization requirements; and the use of interest rate floors. Return to text
6. As an exception, a moderate share of foreign banks reported narrowing the spread of loan rates over the cost of funds for NFNR loans over the past year. Return to text
7. The seven categories of residential home-purchase loans that banks are asked to consider are government-sponsored enterprise (GSE)-eligible, government, QM non-jumbo non-GSE-eligible, QM jumbo, non-QM jumbo, non-QM non-jumbo, and subprime. See the survey results tables that follow this summary for a description of each of these loan categories. The definition of a QM was introduced in the 2013 Mortgage Rules under the Truth in Lending Act (12 C.F.R. pt. 1026.32, Regulation Z). The standard for a QM excludes mortgages with loan characteristics such as negative amortization, balloon and interest-only payment schedules, terms exceeding 30 years, alt-A or no documentation, and total points and fees that exceed 3 percent of the loan amount. For more information on the ability to repay (ATR) and QM standards under Regulation Z, see Consumer Financial Protection Bureau, "Ability-to-Repay/Qualified Mortgage Rule," webpage, https://www.consumerfinance.gov/rules-policy/final-rules/ability-to-pay-qualified-mortgage-rule. In addition, a loan is required to meet certain price-based thresholds included in the General QM loan definition, which are outlined in the Summary of the Final Rule; see Consumer Financial Protection Bureau (2020), "Qualified Mortgage Definition under the Truth in Lending Act (Regulation Z): General QM Loan Definition," final rule (Docket No. CFPB-2020-0020), Federal Register, vol. 85 (December 29), pp. 86308–09, https://www.federalregister.gov/d/2020-27567/p-17. Return to text
8. Large banks reported mixed changes to standards across all RRE loan categories while other banks mostly left standards unchanged. Moreover, while a modest net share of large banks reported easing standards for non-QM non-jumbo loans, a modest net share of other banks reported tightening standards for such loans. Return to text
9. A moderate net share of large banks reported easing standards for HELOCs over the first quarter, while a modest net share of other banks reported tightening standards for HELOCs. Return to text
10. Significant to moderate net shares of large banks reported weakening demand across most categories of mortgages. Modest net shares of other banks reported weakening for some categories of mortgages while also leaving more than half of mortgage categories unchanged. Return to text
11. Banks were asked about changes in credit limits (credit card accounts only), maximum maturity (auto loans and other consumer loans only), loan rate spreads over costs of funds, the minimum percent of outstanding balances required to be repaid each month (credit card accounts only), minimum required down payment (auto loans and other consumer loans only), the minimum required credit score, and the extent to which loans are granted to borrowers not meeting credit scoring thresholds. Return to text
12. As exceptions, for other consumer loans, a modest net share of banks reported narrower interest rate spreads charged on outstanding balances, while a modest net share of banks reported decreasing the extent to which loans are granted to some customers that do not meet credit scoring thresholds. Return to text