woman pointing to a printed loan application with a pen Source/Shutterstock

Financial institutions are reevaluating and tightening all lending criteria, and rightfully so. While the Federal Reserve paused its rate hike campaign in September, relief may be short-lived as the board indicated we’re likely to see another increase before the end of the year. Businesses and consumers are also operating cautiously with a cloud of stubborn inflation hanging overhead.

In short, everyone is keeping their cards (and cash) close to their vests. Lenders are hunkering down as loans continue to outpace deposits. The aggregate loan-to-deposit ratio, a key indicator of liquidity, rose consecutively for the third time in March, according to S&P. Credit unions, in particular, are facing a challenging lending environment.

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