The Fed’s senior loan officer opinion survey for July shows that on net, fewer banks are tightening lending standards for commercial and industrial lending. The increase in spreads of loan rates over banks’ cost of funds is lower for large and medium-sized firms and rising slightly for small firms. Loan demand is about the same as the prior report in April. Lending for commercial real estate loans in all categories show both tighter standards and softer demand.
Banks’ lending standards for households are about unchanged in July from the prior report. Demand for home mortgages is down in July. Standards for home equity loans are about unchanged in July as is demand for home equity lines of credit.
The report said, “While banks, on balance, reported having tightened lending standards further for most loan categories in the second quarter, the net shares of banks that reported having tightened lending standards are lower than in the first quarter across almost all loan categories.”
For all types of mortgage loans, standards are little changed in July from April. However, demand for all types of mortgage loans remains weak.
Importantly for households, banks’ willingness to lend in recent months is no longer declining. Standards continued to tighten for credit cards and consumer credit excluding autos and credit cards, while standards for auto loans are unchanged from the prior report. Demand for auto loans and consumer loans excluding credit cards and autos are declining. Demand for credit cards is up slightly.
