Banks in Q2 keep lending standards static on home, auto loans; lower standards for C&I loans, Fed report finds

Bank lending standards for financing home and auto purchases remained little changed, but benchmarks for commercial and industrial (C&I) loans were eased, according to results of a second-quarter survey of senior bank loan officers released by the Federal Reserve Monday.

The survey results, gathered through the Fed’s July 2018 “Senior Loan Officer Opinion Survey on Bank Lending Practices,” also indicated that a “moderate share” of banks tightened standards on credit card loans, but kept commercial real estate (CRE) lending standards about unchanged, on balance.

The survey, first conducted in 1964 (and revised in 1981) is conducted quarterly by the Fed. For the second quarter of 2018, responses were received from 72 domestic banks (which were reflected in the Fed’s summary of the results) and 22 U.S. branches and agencies of foreign banks. The survey was conducted in July.

The survey also found weaker demand among consumers for residential real estate (RRE) loans during the second quarter, but demand generally for consumer loans was unchanged from the previous quarter.

Comparing current lending standards to those over the last 13 years, the Fed stated, RRE and subprime lending standards “are at the tighter end of the range from 2005 to now.”

On the commercial side, the survey results found “stronger demand” for C&I loans by smaller firms, and weaker demand overall for commercial real estate loans.

Comparing current lending standards to those over the last 13 years, the survey results reported bank levels of lending standards on C&I loans “are currently at the easier end of the range from 2005 to the present.”

For CRE loans, the Fed said banks reported currently having relatively tight lending standards on net.

Senior Loan Officer Opinion Survey on Bank Lending Practices

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