Summary of the January 2025 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS)

The January 2025 SLOOS examined changes in bank lending standards, terms, and demand for loans to businesses and households over the fourth quarter of 2024. It also included special questions about banks’ expectations for 2025.

Key Findings

1. Business Loans

• Tighter Lending Standards: Banks tightened lending standards for commercial and industrial (C&I) loans across all firm sizes.
• Stronger Demand: Demand for C&I loans increased for large and middle-market firms but remained unchanged for small firms.
• Commercial Real Estate (CRE): Lending standards tightened slightly, while demand for CRE loans remained mostly unchanged.

2. Household Loans

• Residential Real Estate (RRE) Loans: Lending standards remained unchanged, but demand weakened across most loan types.
• Consumer Loans:
  • Credit Cards: Standards tightened, and demand weakened.
  • Auto Loans: Standards and demand remained unchanged.
  • Other Consumer Loans: Standards stayed the same, but demand declined.
• Home Equity Lines of Credit (HELOCs): Lending standards and demand remained unchanged.

Banks' Expectations for 2025

• Lending Standards: Expected to ease or remain unchanged across all loan categories.
• Loan Demand: Anticipated to increase in all categories.
• Credit Quality:
  • Expected to improve for business loans.
  • Expected to deteriorate or remain unchanged for most consumer loans.

Conclusion

The survey highlights tighter lending conditions for businesses in late 2024, while household loans saw weaker demand but largely unchanged standards. In 2025, banks expect easier lending conditions, stronger demand, and improving credit quality for business loans while consumer loans may face deteriorating credit performance.