Senior Loan Officer Opinion Survey on Bank Lending Practices
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The October 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices
The October 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 third quarter of 2025.1
Regarding loans to businesses over the third quarter, survey respondents reported, on balance, tighter lending standards for commercial and industrial (C&I) loans to firms of all sizes.2 Banks also reported, on balance, stronger demand for C&I loans from large and middle-market firms and basically unchanged demand from small firms. Furthermore, banks reported generally unchanged standards and demand for most commercial real estate (CRE) loan categories.
For loans to households, banks reported basically unchanged lending standards and stronger demand for residential mortgage loans and home equity lines of credit (HELOCs) on balance. For consumer loans, standards remained basically unchanged for credit card and other consumer loans and eased for auto loans. Meanwhile, demand remained basically unchanged for credit card and other consumer loans and weakened for auto loans.
The October SLOOS included a set of special questions inquiring about the likelihood of approving C&I and credit card loan applications in comparison with the beginning of the year—by firm size and trade exposure levels for C&I loans and by borrower risk for credit card loans. Banks reported being more likely to approve C&I loan applications from both large and small firms with low trade exposures and less likely to approve C&I loan applications from firms of all sizes with high trade exposures. Banks also reported being more likely to approve credit card applications from super-prime and prime borrowers but less likely to approve applications from near-prime or subprime borrowers. In a second set of special questions, banks reported changes in customers’ investment needs to acquire inventory or make advance purchases due to trade developments and changes in customers’ investment needs due to trade-related shifts in product availability and pricing as important reasons for strengthening demand for C&I loans since the beginning of the year. For credit card loans, banks cited increased spending needs for advanced purchases due to trade developments as an important reason for strengthening demand.
Lending to Businesses
(Table 1, questions 1–12; table 2, questions 1–8)
Questions on commercial and industrial lending. Over the third quarter, modest net shares of banks reported having tightened standards on C&I loans to firms of all sizes.3 Meanwhile, banks reported having eased some queried terms for C&I loans to large and middle-market firms. Specifically, moderate net shares of banks reported easing the maximum size of credit lines and narrowing loan rate spreads for these firms, and modest net shares reported easing the cost of credit lines. Most of the other C&I loan terms for larger firms remained basically unchanged on net. In contrast, several terms for C&I loans to small firms tightened, with modest net shares of banks reporting a lower maximum size of credit lines, tightening collateralization requirements, and more use of interest rate floors.4 Most of the remaining C&I loan terms for small firms remained basically unchanged on net. Meanwhile, modest net shares of foreign banks reported having tightened standards for C&I loans.5
Among banks that reported tighter 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.
Among banks that reported easier standards and terms for C&I loans, major net shares cited more aggressive competition from other banks or nonbank lenders as an important reason for doing so. Moderate net shares of banks cited improvements in their bank’s current or expected capital position, a more favorable or less uncertain economic outlook, and increased liquidity in the secondary market for these loans as important reasons for doing so.
Regarding demand for C&I loans over the third quarter, moderate net shares of banks reported stronger demand from large and middle-market firms, while demand from small firms remained basically unchanged. In addition, a moderate net share of banks reported an increase in the number of inquiries from potential borrowers regarding the availability and terms of new credit lines or increases in existing lines. A significant net share of foreign banks reported stronger demand for C&I loans.
The most frequently cited reasons for stronger demand, reported by major net shares of banks, were increased customer financing needs for inventory, accounts receivable, and mergers or acquisitions, and increased customer investment in plant or equipment.6
Questions on commercial real estate lending. Over the third quarter, a modest net share of banks reported tighter standards for construction and land development loans, while standards for loans secured by multifamily properties and nonfarm nonresidential properties remained basically unchanged on net.7 In addition, a modest net share of foreign banks reported easier standards on CRE loans.
Regarding demand for CRE loans, a modest net share of banks reported stronger demand for loans secured by nonfarm nonresidential properties over the third quarter, while demand remained basically unchanged for loans secured by multifamily properties and construction and land development loans.8 Meanwhile, a significant net share of foreign banks reported stronger demand for CRE loans.
Lending to Households
(Table 1, questions 13—26)
Questions on residential real estate lending. Banks generally reported leaving standards basically unchanged over the third quarter across residential mortgage loans, including HELOCs.9 Meanwhile, banks reported stronger demand, on balance, for most residential real estate (RRE) loan categories.10 A moderate net share of banks reported stronger demand for government-sponsored enterprise (GSE)-eligible; government; and qualified mortgage (QM) non-jumbo, non-GSE-eligible residential mortgages; and modest net shares of banks reported stronger demand for QM jumbo and non-QM non-jumbo residential mortgages.11 A moderate net share of banks reported stronger demand for HELOCs.
Questions on consumer lending. Over the third quarter, standards were basically unchanged for credit card and other consumer loans. Meanwhile, a modest net share of banks reported having eased standards on auto loans. Banks reported having left most queried terms on credit card loans, auto loans, and other consumer loans basically unchanged.12 Meanwhile, demand for credit card and other consumer loans remained basically unchanged, and a moderate net share of banks reported weaker demand for auto loans.
Special Questions on Commercial and Industrial Loans and Credit Card Loans
(Table 1, questions 27-30; table 2, questions 9 and 10)
The October SLOOS included a set of special questions inquiring about the likelihood of approving C&I and credit card loan applications in comparison with the beginning of the year—across firm size and trade exposure levels for C&I loans, and borrower risk for credit card loans. A second set of special questions asked about the main factors contributing to changes in demand for C&I and credit card loans since the beginning of the year.
For C&I loans, moderate net shares of banks reported being more likely to approve loan applications from both large and small firms with low trade exposures. In contrast, significant net shares of banks reported being less likely to approve loan applications from firms of all sizes with high trade exposures.
Regarding demand for C&I loans, a significant net share of banks cited changes in firms’ investment needs to build inventories due to trade developments, and a moderate net share cited changes in investment needs due to trade-related shifts in product availability or pricing as important reasons for strengthening demand since the beginning of the year. At the same time, a moderate net share of banks reported changes in attractiveness of nonbank credit sources as an important reason for weakening demand for C&I loans over the same period.
For credit card loans, modest net shares of banks reported being more likely to approve credit card applications for super-prime and prime borrowers. Moderate and modest net shares of banks reported being less likely to approve credit card applications to subprime and near-prime borrowers, respectively.
Regarding demand for credit card loans, a moderate net share of banks cited changes in spending needs for advanced purchases related to trade developments as an important reason for stronger demand since the beginning of the year. In addition, modest net shares of banks reported changes in spending needs due to the economic outlook and due to product availability or pricing as important reasons for stronger demand. Meanwhile, modest net shares of banks reported changes in attractiveness of other bank or nonbank credit sources as reasons for weaker demand since the beginning of the year.
This document was prepared by Colin Campbell, with the assistance of Adrian Balderamos, Jack Keane, and Andre F. Silva, Division of Monetary Affairs, Board of Governors of the Federal Reserve System.
1. Responses were received from 65 domestic banks and 16 U.S. branches and agencies of foreign banks. Respondent banks received the survey on September 22, 2025, and responses were due by October 3, 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 tighter or easier 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. 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
5. Foreign banks reported mixed changes to terms over the third quarter, having eased the maximum size of credit lines, loan rate spreads, and loan covenants, while tightening maximum maturities and costs of credit lines. Return to text
6. Significant net shares of banks also cited customers’ decreased internally generated funds, customer borrowing shifting to their bank from other banks or nonbank sources, and increased precautionary demand for cash and liquidity as important reasons for stronger demand. Return to text
7. While large banks reported easier standards across CRE loan types, other banks reported tighter standards on such loans. Large banks are defined as those with total domestic assets of $100 billion or more as of June 30, 2025. Other banks are defined as those with total domestic assets of less than $100 billion as of June 30, 2025. Return to text
8. These responses were mixed across bank size categories, as large banks reported stronger demand and other banks reported weaker or basically unchanged demand across CRE loan types. Return to text
9. The seven categories of residential home-purchase loans that banks are asked to consider are 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 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
10. Exceptions were non-QM jumbo loans, for which demand was basically unchanged, on net, and subprime residential mortgages, for which modest net shares of banks reported weakened demand. Return to text
11. On balance, large and small banks generally reported stronger demand for most RRE loan categories over the third quarter. Return to text
12. As an exception, a modest net share of banks reported narrower interest rate spreads for auto loans. 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