Banks reported tighter lending standards and weaker demand for commercial and industrial loans to firms of all sizes during the second quarter of 2025, according to the Federal Reserve’s senior loan officer opinion survey released today. Also, banks generally reported tighter standards and weaker demand for commercial real estate loans.
For loans to households, banks reported basically unchanged lending standards and weaker demand for residential mortgage loans, on balance, according to the Fed. In addition, banks reported tighter lending standards and stronger demand for home equity lines of credit. For consumer loans, standards tightened for credit card loans and remained basically unchanged for auto and other consumer loans. Meanwhile, demand weakened for credit card and other consumer loans and strengthened for auto loans.
C&I: Over the second quarter, modest net shares of banks (5%-10%) reported having tightened standards on C&I loans to firms of all sizes. Modest net shares of banks also reported tighter collateralization requirements and higher premiums charged on riskier loans to firms of all sizes. Regarding demand for C&I loans, significant net shares of banks (20%-50%) reported weaker demand from firms of all sizes.
CRE: Moderate (10%-20%) and modest net shares of banks reported tighter standards for loans secured by nonfarm nonresidential properties and construction and land development loans, respectively, while standards for loans secured by multifamily properties remained basically unchanged on net. Moderate net shares of banks reported weaker demand for construction and land development loans and loans secured by nonfarm nonresidential properties, while demand was basically unchanged for loans secured by multifamily properties.
Mortgages: Banks reported having left standards basically unchanged over the second quarter across all types of residential mortgage loans. A modest net share of banks reported having tightened standards for HELOCs.
Personal lending: A moderate net share of banks reported having tightened standards on credit card loans, while standards were basically unchanged for auto and other consumer loans. Moderate and modest net shares of banks reported weaker demand for credit card and other consumer loans, respectively, while a modest net share of banks reported stronger demand for auto loans.
