A mixed picture for households
The Federal Reserve released its July 2026 Senior Loan Officer Opinion Survey on Bank Lending Practices, covering activity from the second quarter, on August 3. Fifty-six domestic banks and 18 U.S. branches of foreign banks were surveyed; the questionnaires went out June 17 with responses due by July 2. For loans to households, banks reported mixed changes in lending standards on residential real estate loans and weaker demand for those loans on balance over the quarter. Standards for home equity lines of credit were reported as unchanged, but demand for HELOCs strengthened — a divergence from the softer demand banks reported for first-lien residential mortgages.
For business lending, banks reported basically unchanged standards for commercial and industrial loans to firms of all sizes, alongside stronger demand for C&I loans from large and middle-market firms. Standards for commercial real estate loans generally eased, the survey found, with demand for CRE loans basically unchanged — a notably different trajectory than the tightening reported for residential lending.
The special question that stands out
The July survey included a set of special questions asking banks where their current lending standards sit relative to the midpoint of the range those standards have occupied since 2005. Banks reported that standards are currently at the tighter end of that two-decade range for every loan category except C&I loans, for which standards are generally easier than their historical midpoint. A second, related special question found — compared with the July 2025 survey a year earlier — banks reported easier levels of standards for all categories except consumer loans, meaning residential and CRE standards, while still tight by the 20-year yardstick, had loosened somewhat over the prior twelve months even as they remained restrictive in absolute terms.
Outside real estate, the survey found standards tightened for credit card loans, with demand remaining basically unchanged, while standards for auto and other consumer loans stayed basically unchanged; demand for auto loans weakened and demand for other consumer loans was unchanged.
Reading the residential result
SLOOS reports net percentages of banks tightening or loosening standards and reporting stronger or weaker demand — a qualitative diffusion measure, not a count of specific underwriting changes such as minimum credit scores or maximum debt-to-income ratios. The "mixed" characterization for residential standards means different banks moved in different directions rather than a uniform shift. The survey does not report why individual banks moved as they did, and the special question measures where standards sit within their two-decade range, not how restrictive they are in absolute terms.
Read together, the two residential findings describe an origination market that was neither loosening much nor drawing stronger demand in the second quarter: standards at the tighter end of their post-2005 range, and demand weaker on balance. The survey does not identify the cause of either result, and it does not measure originations; volumes are reported separately by the Mortgage Bankers Association and in Home Mortgage Disclosure Act data.
On the commercial side, the survey found moderate and modest net shares of banks easing standards for loans secured by nonfarm nonresidential properties and by multifamily properties respectively, while standards for construction and land-development loans stayed basically unchanged. Large banks, those with $100 billion or more in domestic assets, eased standards across all three commercial-real-estate categories, while smaller banks left multifamily and construction standards basically unchanged and foreign banks reported a moderate net tightening — a divergence in commercial-real-estate underwriting between large domestic banks and foreign lenders operating in the U.S. that the survey does not attempt to explain.