Fed: Senior Loan Officer Opinion Survey on Bank Lending Practices released

Business Lending:

• C&I Loans (Commercial and Industrial loans):

  • Lending standards tightened for firms of all sizes.

  • % of Banks tightening was the highest in more than a year

  • Loan terms also tightened: smaller credit lines, higher premiums, stricter covenants and collateral requirements.

  • Demand weakened significantly across all firm sizes.

  • Key reasons for tightening: uncertain economic outlook, regulatory concerns, industry-specific problems, and reduced risk appetite.

• CRE Loans (Commercial Real Estate):

  • Tighter standards for construction & land development and nonfarm nonresidential loans.

  • Multifamily loan standards were mostly unchanged.

  • Demand was mixed: weaker at most banks, but some large and foreign banks reported stronger demand.

  • Over the past year, banks tightened loan-to-value ratios, debt service coverage, and reduced interest-only periods.

  • Office loans saw the most tightening across all queried policy areas.

Household Lending:

• Residential Real Estate Loans (RRE):

  • Lending standards mostly unchanged, except modest tightening for non-QM jumbo mortgages.

  • Demand weakened across most mortgage categories.

  • HELOC standards were stable, but demand for HELOCs modestly strengthened.

• Consumer Loans:

  • Credit card lending standards tightened slightly (especially credit limits).

  • Auto and other consumer loan standards remained mostly unchanged.

  • Demand weakened for credit card and other consumer loans; auto loan demand was stable.

This article was written by Greg Michalowski at www.forexlive.com.