AFSA Member Companies’ assessment of the current and prospective business environment remained positive on balance in the first quarter of 2025 according to the results of AFSA’s Q1 Consumer Credit Conditions Index Survey (C3 Survey). However, the margin between those with positive versus negative views of the current and prospective business environment was smaller than in the fourth quarter of 2024. This was true for overall business conditions and several indicators of the business environment included in the survey.

The C3 Index is based on a quarterly survey of AFSA’s membership of leading providers of consumer credit. Participants provide their views on the business conditions they face – and which affect their ability to serve consumers in need of credit – compared to the previous quarter, as well as their expectations for the coming six months. The C3 Index provides unique insights beyond what is available in other industry sentiment surveys or government statistical reports.

The Net Increasing Index (NII) for current overall business conditions was positive for the third consecutive quarter in Q1. At +15.6, the NII was lower than the +21.4 recorded in the fourth quarter of 2024 but higher than in each of the first three quarters of last year. The NII is the percentage of lenders who reported conditions improved minus the percentage who reported conditions worsened. A positive reading indicates more respondents claimed conditions improved than reported they weakened and vice-versa.

Similarly, the view on the outlook over the next six months was positive on balance in the first quarter but less so than in recent quarters. The NII was +14.3, well below the +50.0 recorded in the fourth quarter of last year and slightly below +18.9 in the third quarter of last year.

The survey results reflect conflicting economic trends. Federal financial regulation has rapidly shifted from the highly adversarial stance of the last several years. At the same time, a high degree of uncertainty around trade and tariff policy, the job market, higher prices for basic goods, and access to credit, has led to volatility in financial markets and has posed a substantial drag on consumer and business confidence.

Consequently, respondents’ assessments of several business indicators, although pointing to continued improvement in the first three months of the year, nonetheless were subdued compared to the previous quarter. This is true of current and future loan demand and funding costs. In contrast, current loan performance turned positive on balance in the first quarter for the first time in the history of the survey. The outlook for loan performance, though, only broke even on net, with an NRI of 0 compared to +51.2 in the previous survey.

Detailed results from the first quarter AFSA C3 Index survey are available on Case for Credit.