Banks continued to ease standards on commercial, mortgage and personal loan products amid mixed demand, according to the Federal Reserve’s senior loan officer opinion survey released today.
- C&I. Banks reported easing standards and terms on C&I loans to firms of all sizes, with 14.5% on net reporting easing lending standards somewhat for large and middle-market firms and 9.4% easing somewhat for small firms. Forty-four percent of respondents said that more aggressive competition from banks or nonbank lenders was a “very important” factor in their decision to ease terms and standards. Demand for C&I loans from large and middle-market firms picked up, with a net 21.8% noting that it was moderately stronger, while for small firms, a net 9.3% said demand was moderately stronger.
- CRE. Demand for loans secured by multifamily properties picked up in the fourth quarter, with a net 37.7% reporting stronger demand. A net 23% of banks also reported easing standards for these loans. Firms reported slightly stronger demand for construction, land development and nonfarm residential loans, with a net 13.2% reporting moderately stronger demand. Moderate net shares of banks eased standards for these loans—about 10% on net did so. Meanwhile, a net 14.5% reported easing standards for loans secured by nonfarm residential properties, and a net 11.6% of banks reported stronger demand.
- Mortgages. Continuing with the trend of easing, banks also reported loosening standards for most residential real estate loans and home equity lines of credit, though standards for GSE-eligible and government mortgages remained basically unchanged. Banks reported weaker demand on net for mortgage loans over the fourth quarter, including GSE-eligible and government mortgages, for which a net 23.3% reported weaker demand.
- Personal loans. Demand strengthened for credit card loans over the fourth quarter as standards also eased—19.6% on net reported moderately stronger demand. Meanwhile, a net 7.3% of banks reported weaker demand for auto loans, while for other loan types, demand remained mostly unchanged.