Lending officers told the Fed that lending standards on consumer credit card and auto loans have eased but that lending on non-traditional closed-end mortgages has tightened. The Fed also said that reports of tightening and easing were roughly on home equity lines of credit and prime closed-end residential real-estate loans.
The loosening of standards or terms on commercial lending was due to more competition from other banks or non-bank lenders. Some banks also noted a more favorable economic outlook and increased risk tolerance.
More banks reported that spreads have reduced rather than expanded on commercial real estate loans, and more banks reported easier rather than tighter policies on maximum size and maturity of such loans.
Demand for residential real estate loans was weaker for all types of loans according to the Fed survey. Demand for credit card and auto loans was stronger.
On the whole, a “large fraction” of surveyed banks expect higher growth this year in outstanding credit card loans to prime or superprime customers. A smaller fraction expect higher growth in lending to nonprime customers.
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