Banks have been easing their lending standardsfor three months, particularly to businesses, but that hasn’t fueled demand for credit.
The Federal Reserve’s quarterly survey of senior loan officers at 73 big U.S. banks and 22 U.S. branches of foreign banks found that U.S. banks have generally made it easier for businesses of all sizes to get a loan, but that there has been “little change in demand” for what are called commercial and industrial loans over the past three months.
Among U.S. banks that have eased loan terms to businesses, all cited more aggressive competition from both rival commercial banks as well as more “nonbank” lenders.
The survey also found that banks, as a whole, didn’t substantially change standards or terms on lending to households, although it was slightly easier for prime borrowers to get a mortgage. Still, demand for those loans for even the most credit-worthy borrowers was weaker.
Findings of the lending-practices survey, released Monday, mirror comments made at Chicago conference Monday morning held by Bank Director magazine.
“Loan growth is simply anemic,” Steven Hovde, chief executive of Inverness-based Hovde Group, told the group of bank executives and board members, who were meeting to learn about compensation trends in their industry. ” Banks are a reflection of the economy, and there’s not strong enough economic growth.”
byerak@tribune.com | Twitter: @beckyyerak
