Banks report tighter lending standards and rising loan demand in latest survey
Banks reported tighter lending standards for commercial and industrial (C&I) loans in their latest survey, with stronger demand from large and middle-market firms. Demand from small firms remained unchanged, while commercial real estate loan demand was also stable. For household loans, banks noted unchanged standards but weaker demand in most residential categories. Credit card loan standards tightened, while auto loan standards remained stable. Demand for credit card and other consumer loans weakened. Looking ahead, banks expect lending standards to either ease or stay the same in 2025, with stronger demand anticipated across all loan categories. They foresee improved loan quality for business loans but stable or declining quality for most consumer loans.