Consumer lending largely unchanged in slow economy

WASHINGTON-According to the Senior Loan Officers Opinion Survey on Bank Lending Practices, domestic banks’ credit standards remain largely unchanged for residential mortgage loans over the past three months. Approximately 25% of the respondents, on net, reported an increase in demand for residential mortgages in the same period. The survey included 57 large domestic banks and 20 U.S. branches and agencies of foreign banks. About 10% of domestic banks reported tightening standards on credit card and other consumer loans over the survey period, down from 20% and 18%, respectively, in May. Additionally, more than 10% of respondents increased the minimum required credit score for both categories of consumer loans. For consumer loans other than credit cards, 14% of domestic institutions on net increased spreads over their cost of funds while very few banks increased spreads on credit card loans in August. According to survey respondents, 5% of banks reported stronger demand for consumer loans over the past three months. For commercial lending, 40% of domestic banks reported tightening their credit standards, down from 50% in May and 60% in August. Of domestic institutions, 32% reported lower commercial real estate loan demand over the past three months, as well as 10% of foreign institutions.