The Federal Reserve released the Senior Loan Officer Opinion Survey four times a year. The July report showed that conditions on the commercial and industrial (C&I) side of the survey were not much changed from the prior edition in April. Standards and terms of C&I lending was little changed for all sizes of firms. The exception was that standards were tighter for all types of commercial real estate lending. Demand for C&I loans was also “basically unchanged” from the prior report except for lower demand for commercial real estate lending. This mirrors data that business investment in real estate has fallen sharply in the second quarter.
For household lending, banks reported that standards were tighter for credit cards, but also “basically unchanged on auto loans and most categories of residential real estate (RRE) loans”. Standards for home equity lines of credit (HELOCs) were “relatively tight”, which might suggest that some borrowers might opt for refinancing to take some equity out of their homes rather than a second mortgage. The eye opener in the report was an upswing in demand for household lending for residential real estate, with smaller firming in demand for credit cards and auto loans. Overall, banks’ willingness to lend to households remained about the same.
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