Tighter standards for loans but unchanged or weaker demand prevalent in quarterly SLOOS
Tighter standards were dominant for both commercial and industrial (C&I) and commercial real estate (CRE) loans in the second quarter – but demand was unchanged for the former and weaker for the latter, according to a report issued Monday by the Federal Reserve.
In the July 2024 senior loan officer opinion survey on bank lending practices (known as the “SLOOS” at the Federal Reserve), the agency said banks reported tightened lending standards for most loan categories in the second quarter.
The SLOOS is a survey of up to 80 large domestic banks and 24 U.S. branches and agencies of foreign banks, the Fed said, which is generally conducted quarterly to time it so that results are available for the next meeting of the agency’s rate-setting Federal Open Market Committee (FOMC). The next meeting of the group is set for Sept. 17-18.
Loans to households had unchanged lending standards, but also had weaker demand, the Fed reported, across all categories of residential real estate (RRE) loans. Home equity lines of credit (HELOCs) also had unchanged lending standards and unchanged demand, the agency said.
Credit card lending standards tightened, however, but those for auto loans remained unchanged. Demand for credit card loans remained unchanged, but demand for auto loans weakened, according to the report.
Senior Loan Officer Opinion Survey on Bank Lending Practices