Continued tightening of lending standards, weak demand revealed in Fed survey
The Federal Reserve’s third-quarter senior loan officer opinion survey (SLOOS) revealed banks’ continued tightening of standards and weakening demand for loans to consumers.
“Banks continue to pull back on credit extension,” said NAFCU Chief Economist and Vice President of Research Curt Long. “In times of scarce credit, the role of credit unions in providing a path to low-cost loans grows even more important.”
During the third quarter, a significant net shares of banks reported tightened lending standards for credit loans.
A modest net fraction of banks experienced stronger demand for auto loans while all other consumer loans continued to weaken. However, reported changes in demand for consumer loans differed by bank size, with large banks reporting stronger or unchanged demand for all categories while other banks reported demand to be weaker.
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