Banks ease loan standards and terms according to latest Fed survey

The Federal Reserve’s October senior loan officer opinion survey (SLOOS) found that over the third quarter, banks generally reported having eased standards and terms regarding C&I loans to firms of all sizes. Modest net shares of banks reported stronger demand from large and middle-market firms, while small firms remained unchanged.

“Banks eased lending standards over the third quarter across nearly every loan category. Demand is improving but has not recovered pre-COVID levels,” stated NAFCU Chief Economist and Vice President of Research Curt Long. “The exception is residential real estate, where low rates have spurred an enormous rise in demand, particularly for jumbo loans. NAFCU expects loan demand to continue to improve incrementally with rates of employment.”

In addition, here are a few key findings from the third-quarter survey:

• banks reported having eased standards on multifamily loans, while modest net share of banks reported easing standards on nonfarm nonresidential loans and construction land and development loans;

 

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