Bank Lending Practices, April 2015

The April 2015 Senior Loan Officer Opinion Survey on Bank Lending Practices addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months. This book discusses the responses from 76 domestic banks and 23 U. S. branches and agencies of foreign banks. Regarding loans to businesses, the April survey results indicated that, on balance, banks reported little change in their standards on commercial and industrial (C& I) loans in the first quarter of 2015. On net, banks reported having eased some price terms. With respect to commercial real estate (CRE) lending, on balance, survey respondents reported having eased standards on loans secured by nonfarm nonresidential properties. A few large banks also indicated that they had eased standards on construction and land development loans, and some large banks reported that they had eased standards on loans secured by multifamily properties. In addition, survey respondents reported having eased some CRE loan terms, on net, over the past year. On the demand side, banks indicated having experienced little change in demand for C& I loans in the first quarter; in contrast, respondents reported stronger demand for all three categories of CRE loans covered in the survey. The survey contained a set of special questions about lending to firms in the oil and natural gas drilling or extraction sector. Banks expected delinquency and charge-off rates on such loans to deteriorate over 2015, but they indicated that their exposures were small, and that they were undertaking a number of actions to mitigate the risk of loan losses. Regarding loans to households, banks reported having eased lending standards for a number of categories of residential mortgage loans over the past three months on net. Most banks reported no change in standards and terms on consumer loans. On the demand side, moderate net fractions of banks reported stronger demand across most categories of home-purchase loans. Similarly, respondents experienced stronger demand for auto and credit card loans on balance.