Banks generally eased lending standards on loans and saw greater demand, except for mortgages, where as many banks tightened standards as eased and demand fell, according to the January 2014 Senior Loan Officer Opinion Survey on Bank Lending Practices, released by the Fed Monday.
Commercial and industrial loans policies were eased and demand rose for businesses of all sizes, the Fed said, with increased competition often seen as the impetus for easing standards. Standards were also lowered for commercial real estate loans.
"Changes in standards and terms on, and demand for, loans to households were mixed," according to the survey. "The survey results indicated that a modest fraction of large banks had eased standards on prime residential real estate loans, but a similar fraction of small banks had tightened standards on such loans. A moderate fraction of banks reported, on balance, weaker demand for prime mortgage loans to purchase homes, and a large net fraction reported weaker demand for nontraditional mortgage loans. Demand for home equity lines of credit (HELOCs) was little changed. Respondents indicated that they had eased standards on credit card loans, auto loans, and other consumer loans. Most banks reported little change in most terms on consumer loans, with the exception of credit card limits and loan rate spreads on auto loans, which modest fractions of banks reported having eased on balance. Modest net fractions of banks reported increases in demand for all types of consumer loans."
