Banks reported basically unchanged lending standards for commercial and industrial loans to large and middle-market firms, and tighter standards for loans to small firms, during the third quarter of 2024, according to the Federal Reserve’s senior loan officer opinion survey released today. Meanwhile, banks reported weaker demand for C&I loans to firms of all sizes. They also reported tighter standards and weaker demand for all commercial real estate loan categories.
For loans to households, banks reported basically unchanged lending standards and weaker demand across most categories of residential real estate loans, the Fed said. In addition, banks reported basically unchanged lending standards and demand for home equity lines of credit. Standards reportedly tightened for credit card loans and remained basically unchanged for auto and other consumer loans, while demand weakened for auto and other consumer loans and remained basically unchanged for credit card loans.
C&I: Tightening of standards was most widely reported for premiums charged on riskier loans, for which moderate net shares of banks (10%-20%) reporting tightening. In addition, modest net shares of banks (5%-10%) reported having tightened collateralization requirements, tightened loan covenants, and widened spreads of loan rates over their bank’s cost of funds for loans to small firms.
CRE: Moderate net shares of banks reported having tightened standards for all types of CRE loans. Large banks reported that lending standards were basically unchanged for construction and land development and nonfarm nonresidential loans, while a modest net share of large banks reported easier lending standards for multifamily loans. In contrast, significant net shares of other banks (20%-50%) reported tightening for all CRE loan categories.
Mortgages: Lending standards were basically unchanged for all RRE loan categories except for those classified as subprime, for which a moderate net share of banks reported tightening standards. In addition, banks reported that standards for HELOCs were basically unchanged. Banks also reported weaker demand for most categories of RRE loans over the third quarter, although less broadly than in the previous quarter.
Personal lending: Moderate net shares of banks reported having tightened lending standards for credit card loans, while standards were basically unchanged for auto and other consumer loans. Moderate net shares of banks reported lowering credit limits and increasing minimum credit score requirements for credit card loans, while all other queried terms for credit cards were left basically unchanged.