Fed Survey Shows No Change in Small Biz Lending Demand or Bank Underwriting
Some U.S. banks eased underwriting for business loans to large firms, but standards for small businesses remained the same, according to the July 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices released Monday by the Federal Reserve.
Loan demand from large and middle-market firms strengthened over the past three months, but demand from small businesses was unchanged during the same period.
A modest fraction of banks reported that they had eased lending standards on commercial real estate loans over the past three months, while a relatively sizable fraction, on net, continued to indicate that demand for such loans had strengthened, the Fed said.
Prime mortgage underwriting standards showed little change, but nontraditional mortgage lending standards tightened somewhat. However, a relatively large fraction of respondents reported having experienced stronger demand for prime mortgages over the same time period.
A relatively large percentage of banks reported stronger demand for auto loans, on balance, while fewer banks reported stronger demand for credit cards and other consumer loans.
About one-third of respondents participating in the Federal Housing Finance Agency’s revised Home Affordable Refinance Program reported that HARP 2.0 refinance applications accounted for a significant share of total refinance applications over the past three months.
Additionally, a large majority of respondents indicated they anticipate more than 60% of HARP applications will be approved.
Another question in the survey revealed that lending standards for most categories of loans remained at least somewhat tighter, on balance, than the middle of their respective ranges since 2005, the Fed said.