U.S. ECONOMICS: Fed Survey on Bank Lending Practices

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The April 2014 Senior Loan Officer Opinion Survey on Bank Lending Practices addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months based on the responses from 74 domestic banks and 23 U.S. branches and agencies of foreign banks.

Regarding loans to businesses, the April survey results generally indicated that banks eased their lending policies for commercial and industrial (C&I) and commercial real estate (CRE) loans and experienced stronger demand for both types of loans over the past three months.

Regarding loans to households, banks reported mixed changes in standards. While banks eased standards on consumer credit card and auto loans, they tightened standards on nontraditional closed-end mortgage loans.

Reports of tightening and easing of standards on prime closed-end residential real estate loans and on home equity lines of credit were roughly equal. On the demand side, reports of weaker demand outnumbered reports of stronger demand for each type of residential real estate loan, and the opposite pattern held for credit card and auto loans.

Several domestic banks indicated that they were more willing to make consumer installment loans as compared with the previous quarter, while no banks indicated they were less willing.

Looking ahead, a large fraction of banks, on net, expect higher growth (or lower contraction) during 2014 compared with 2013 in outstanding consumer credit card loans to prime or superprime customers. A smaller net fraction of banks expect higher growth (or lower contraction) in outstanding consumer credit card loans to nonprime borrowers.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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