By John Vermillion
Loans to non-depository financial institutions, or NDFIs, capture banks’ credit exposure to financial intermediaries that do not take deposits, such as mortgage companies, private credit and private equity funds, consumer finance firms, broker-dealers and securitization vehicles. These entities play a central role in credit intermediation outside the traditional banking system.
Until recently, these exposures were aggregated in one line item in public regulatory filings under “Loans to non-depository financial institutions.” That changed in May 2024, when U.S. banking regulators finalized new call-report instructions requiring banks with total assets above $10 billion to disclose their loans and commitments to NDFIs across five categories: mortgage credit, business credit, private equity fund, consumer credit and other intermediaries. The reclassification separated NDFI exposures from broader commercial loan lines, creating the first consistent dataset on how U.S. banks finance these credit intermediaries.
Aggregate call report data from 2016 onward show an accelerating climb in NDFI lending. The total has roughly quadrupled, surpassing $1 trillion by mid-2025. Growth has been persistent through rate cycles, suggesting strong demand from nonbanks for liquidity from banks. Over the 2010-2025 period, NDFI lending expanded at an average annual rate of about 23% (some growth due to reclassification), compared with roughly 4% for total bank loans, highlighting how consistently this segment has outpaced broader credit expansion.
The public now has a transparent view into a corner of the financial system that has grown rapidly alongside the rise of private credit and other nonbank financial institutions.
The trend is led by the global systemically important banks. In both absolute terms and relative to total assets, GSIB exposures are the highest, rising from roughly $200 billion in the first quarter of 2016 to more than $650 billion by 2025. When scaled by assets, GSIB lending to NDFIs now exceeds 6% of total assets, while regional banks approach 5%, midsized banks hover near 4% and community banks remain below 1%.
The new component-level disclosures reveal what sits inside those totals. For all banks combined, business credit intermediaries and mortgage credit intermediaries account for the largest shares, followed by private equity fund exposures. GSIBs show a balanced distribution across all five categories, consistent with their broad role in providing credit lines to investment funds, securitization warehousing and capital markets funding. Regional and midsized banks, by contrast, are more concentrated in mortgage and consumer credit intermediaries, reflecting their closer ties to real estate and retail markets. Note that community banks fall below the reporting threshold to break out NDFI loan categories but hold $47.5 million in total.
The new NDFI loan disclosures transform an opaque segment into a measurable and monitorable part of the banking landscape. They show a market led by the largest banks, growing at double-digit rates and bridging the boundary between regulated and non-regulated finance.
John Vermillion is an economic research analyst at ABA.
