Commercial and industrial loan standards tightened in the second quarter although demand remained nearly the same, according to the July 2016 Senior Loan Officer Opinion Survey on Bank Lending Practices, released by the Federal Reserve on Monday.
Standards on commercial real estate loans were also tightened, while demand for these loans ramped up.
Banks said "standards on all categories of residential real estate (RRE) mortgage loans were little changed, on balance, except for those eligible for purchase by government-sponsored enterprises (known as GSE-eligible mortgage loans), for which a moderate net fraction of banks reported having eased standards, and for subprime residential mortgages, for which a moderate net fraction of banks reported having tightened standards."
Demand for most types of residential real estate loans picked up in the quarter, according to the survey.
"In addition, banks indicated that changes in standards on consumer loans were mixed, while demand strengthened across all consumer loan types," the survey noted.
Overall, standard for all categories of C&I loans were looser than the midpoints of the ranges since, the survey said, "except for syndicated loans to below-investment-grade firms. However, banks also generally indicated that standards on all types of CRE loans are currently tighter than the midpoints of their respective ranges."
