Banks reported tighter standards for both commercial and industrial loans and commercial real estate loans during the second quarter of 2024, although demand for C&I loans remained unchanged while demand for CRE loans weakened, according to the Federal Reserve’s senior loan officer opinion survey released today.
For loans to households, banks reported basically unchanged lending standards and weaker demand across all categories of residential real estate loans, according to the Fed. Banks also reported basically unchanged lending standards and unchanged demand for home equity lines of credit. Standards reportedly tightened for credit card and other consumer loans but remained basically unchanged for auto loans. Demand weakened for auto and other consumer loans but remained basically unchanged for credit card loans.
C&I: Modest net shares of banks (5%-10%) reported having tightened standards on C&I loans to firms of all sizes. In addition, moderate net shares of banks (10%-20%) reported having reduced the maximum size of credit lines and having tightened collateralization requirements for large and middle-market firms.
CRE: Significant net shares of banks (20%-50%) reported having tightened standards for all types of CRE loans. Significant net shares of other banks reported such tightening for all CRE loan categories, while large banks reported that lending standards were basically unchanged for all types of CRE loans. Meanwhile, moderate net shares of banks reported weaker demand for all types of CRE loans.
Mortgages: Banks reported that lending standards were basically unchanged for all RRE loan categories. In addition, banks reported that standards for HELOCs were basically unchanged. Banks reported weaker demand for all categories of RRE loans over the second quarter.
Personal lending: Moderate net shares of banks reported having tightened lending standards for credit card and other consumer loans, while standards were basically unchanged for auto loans. Banks also reported having tightened most queried terms on credit card loans. Specifically, moderate net shares of banks reported lowering credit limits and increasing minimum credit score requirements for credit card loans, while a modest net share of banks decreased the extent to which loans are granted to customers who do not meet credit-scoring thresholds. Moderate and modest net shares of banks reported weaker demand for auto loans and other consumer loans, respectively, while demand for credit card loans was basically unchanged over the second quarter.