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Monday, February 2, 2015

Bank Lending Standards Ease Slightly

Over the past three months, banks eased lending standards to all business types, according to the January Federal Reserve’s Senior Loan Officer Survey.

On net, 5.5% of the responding banks reported easing standards for commercial and industrial (C&I) lending to large and medium sized borrowers, and 89% said lending standards remained basically unchanged. For small business loans, 5.7% of banks loosened standards and 91.4% said lending standards remained unchanged. During the period, a net 17.9% of banks reported stronger loan demand for medium-to-large borrowers and a net 5.7% reported stronger demand from small borrowers; similarly, respondents experienced stronger demand for all three categories of CRE loans covered in the survey.

Regarding loans to households, the January survey featured revised and expanded categories of residential real estate loans to reflect the CFPB’s qualified mortgage (QM) rules and provide more detailed information on the mortgage market. For residential mortgages categorized as QM, non-jumbo, non-GSE eligible, on net, 3.4% of banks have eased lending standards somewhat and 13.8% of banks found that demand was moderately weaker. For residential mortgages categorized as GSE-eligible, on net, 12.5% of banks eased standards somewhat and 18.7% of banks found that demand was moderately weaker.

Read the Federal Reserve release.

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