Tightening loan standards and weaker demand were reported for many commercial and consumer loan categories by senior loan officers at large banks participating in the Federal Reserve’s April Senior Loan Office Opinion Survey (SLOOP), according to the report released Monday.
While banks, on balance, reported having tightened lending standards further for most loan categories in the first quarter, the Fed said generally that lower net shares of banks reported tightening lending standards than in the fourth quarter of last year across most loan categories.
In the survey, respondents “on balance” reported tighter standards and weaker demand for commercial and industrial (C&I) loans to firms of all sizes, and for all commercial real estate (CRE) loan categories, over the first quarter, the Fed said.
It said that for all CRE loan categories, banks reported having tightened all queried lending policies, including the spread of loan rates over the cost of funds, maximum loan sizes, loan-to-value ratios, debt service coverage ratios, and interest-only payment periods.
For loans to households, banks reported that lending standards tightened across some categories of residential real estate (RRE) loans while remaining unchanged for others on balance, and demand weakened for all RRE loan categories. The Fed said banks also reported tighter standards and weaker demand for home equity lines of credit (HELOCs).
For credit card, auto, and other consumer loans, standards reportedly tightened and demand weakened, the report showed.
Respondent banks received the survey on March 25, 2024, and responses were due by April 8, 2024.
The April 2024 Senior Loan Officer Opinion Survey on Bank Lending Practices
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