Senior Loan Officer Opinion Survey on Bank Lending Practices
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The October 2026 Senior Loan Officer Opinion Survey on Bank Lending Practices
The October 2026 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) addressed changes in the standards, terms, and demand for bank loans to businesses and households over the past three months, which generally corresponds to the third quarter of 2026.1
Lending to Businesses
(Table 1, questions 1–12; table 2, questions 1–8)
Questions on commercial and industrial lending. Over the third quarter, banks reported that lending standards for commercial and industrial (C&I) loans to large and middle-market firms were basically unchanged, while standards tightened for C&I loans to small firms.2, 3 In addition, banks reported having eased or left basically unchanged most queried terms for C&I loans to firms of all sizes. As exceptions, banks reported tightening standards for premiums charged on riskier loans for firms of all sizes. Banks also reported tightening for collateralization requirements and use of interest rate floors for small firms.4 The most frequently cited reasons for tighter standards were a less favorable or more uncertain economic outlook and a worsening of industry-specific problems.
Banks reported weaker demand, on net, for C&I loans from firms of all sizes. As important reasons for weaker demand, banks cited decreasing customer investment in plant or equipment products and customer borrowing shifting to more attractive bank or nonbank funding sources. Foreign banks reported having left standards basically unchanged and stronger demand for C&I loans.
Questions on commercial real estate lending. Banks reported having tightened, on net, lending standards for all commercial real estate (CRE) loan categories: those secured by construction and land development, nonfarm nonresidential properties, and multifamily properties. Furthermore, banks reported weaker demand for all CRE loan categories. In addition, foreign banks reported tighter standards and stronger demand for CRE loans on net.
Lending to Households
(Table 1, questions 13—27)
Questions on residential real estate lending. Banks reported having left standards basically unchanged, on net, over the third quarter for most types of residential mortgage loans except qualified mortgage (QM) jumbo and non-QM jumbo mortgages, for which banks reported having eased standards.5 In contrast, banks reported tightening standards for subprime mortgages. Standards for home equity lines of credit (HELOCs) were also basically unchanged on net. Meanwhile, banks reported weaker demand, on balance, across all residential real estate loan categories and unchanged demand for HELOCs.
Questions on consumer lending. Over the third quarter, banks reported having left lending standards and most queried terms basically unchanged for credit card loans, auto loans, and other consumer loans.6 As exceptions, banks reported tightening the extent to which loans are granted to borrowers not meeting credit scoring thresholds for credit card loans and other consumer loans. Banks also reported tightening credit limits on credit card accounts and the minimum required credit score for auto loans. Banks reported stronger demand for credit card loans but weaker demand for auto loans during the third quarter, while demand for other consumer loans remained basically unchanged.
Special questions on changes in banks’ lending policies on credit card loans over the past year. The October SLOOS included a set of special questions inquiring about the likelihood of approving credit card applications across borrower risk categories and the factors contributing to changes in demand for credit card loans over the past year. Banks reported being more likely to approve credit card applications to super-prime and prime borrowers and less likely to approve applications to subprime borrowers, with small banks driving the trend for subprime borrowers. Meanwhile, the likelihood of approving credit card applications remained basically unchanged for near-prime borrowers. As reasons for stronger demand for credit card loans over the past year, banks most frequently cited changes in customers’ spending needs in response to price changes for goods and services they face.
Special Questions on Lending to Nondepository Financial Institutions
(Table 1, questions 29-33; table 2, questions 9-13)
A second set of special questions inquired about changes in lending standards and demand for bank loans to nondepository financial institutions (NDFIs) over the past quarter. Banks reported, on net, having tightened standards for all queried types of loans to NDFIs—including loans to mortgage credit intermediaries, business credit intermediaries, private equity funds, consumer credit intermediaries, and other NDFIs—over the past quarter.7 The most frequently cited reasons for tighter standards were a less favorable or more uncertain economic outlook and a deterioration in the financial strength of NDFI borrowers. In addition, banks reported having tightened or left basically unchanged all surveyed terms for NDFI loans.8 Banks also reported strengthened demand for NDFI loans from business credit intermediaries and private equity funds, while demand from mortgage credit intermediaries, consumer credit intermediaries, and other NDFIs remained unchanged.9 Among banks that reported strengthened demand, the most commonly cited reasons were an increase in working capital or liquidity needs, improvement in NDFIs’ financial investment opportunities, and increased refinancing needs.
This document was prepared by Adrian Balderamos and Meghan Carpenter, with the assistance of Ricardo Duque Gabriel, Division of Monetary Affairs, Board of Governors of the Federal Reserve System.
1. Responses were received from 61 domestic banks and 18 U.S. branches and agencies of foreign banks. Respondent banks received the survey on September 21, 2026, and responses were due by October 5, 2026. Unless otherwise indicated, this summary refers to the responses of domestic banks. Return to text
2. 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. Return to text
3. 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
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 to 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. 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
6. 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
7. Foreign banks also reported tighter standards for all queried types of NDFI loans except consumer credit intermediaries and mortgage credit intermediaries. Return to text
8. 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
9. Foreign banks reported mixed changes to demand for NDFI loans, with demand from private equity funds strengthening. In contrast, demand from consumer credit intermediaries and other NDFIs weakened while demand for all other loans remained unchanged. Return to text