WASHINGTON–Demand for commercial and industrial (C&I) loans weakened over the second quarter of 2017, while banks left their standards on C&I loans basically unchanged, according to new data released by the FDIC.
However, standards on commercial real estate (CRE) loans tightened even as demand also weakened on net, while on consumer loans banks reported that lending standards on all categories of residential real estate (RRE) loans eased or remained unchanged.
That’s according to the Federal Reserve’s July 2017 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS), which is a summary of responses from 76 domestic banks and 22 U.S. branches and agencies of foreign banks.
The banks reported that, on net, the demand for most categories of RRE loans strengthened over the second quarter, although, again, the net share was never more than moderate. In addition, modest net fractions of banks reported tightening standards and weaker demand for auto and credit card loans, the Federal Reserve said.
“Responses to a set of special annual questions on the approximate levels of lending standards suggested that domestic banks' lending standards for all categories of C&I loans are currently easier than the midpoints of the ranges that have prevailed since 2005,” the Fed said. “In contrast, banks also indicated that standards on all types of CRE loans are currently tighter than the midpoints of their respective ranges.”
In addition, on balance, the Federal Reserve said that banks reported that the levels of standards for all types of RRE loans are currently at least as tight as the midpoints of the ranges observed since 2005. Moreover, banks indicated that the levels of standards for consumer loans to subprime borrowers are currently still tighter than the midpoints of their respective ranges, while the analogous readings for consumer loans to prime borrowers are currently easier than their midpoints.