FRB July 2021 Senior Loan Officer Opinion Survey on Banking Lending Practices

FRB released its July 2021 Senior Loan Officer Opinion Survey on Bank Lending Practices which addressed changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the second quarter of 2021.  

Regarding loans to businesses, respondents to the July survey, on balance, reported easier standards and stronger demand for C&I loans to firms of all sizes over the second quarter. For CRE, standards on multifamily and construction and land development loans eased, while standards on loans secured by nonfarm nonresidential properties remained basically unchanged. Banks reported stronger demand for all CRE loan categories. 

For loans to households, banks eased standards across most categories of RRE loans, on net, and reported stronger demand for most types of RRE loans over the second quarter. Banks also eased standards and reported stronger demand across all three consumer loan categories—credit card loans, auto loans, and other consumer loans. 

The survey included an additional set of special questions inquiring about the current level of lending standards relative to the midpoint of the range over which banks’ standards have varied since 2005. Banks, on balance, reported that their lending standards on C&I loans are currently at the easier end of the range of standards between 2005 and the present. For subprime consumer loans and most categories of commercial or residential mortgages, banks reported currently having relatively tighter levels of lending standards on net. However, the reported levels of lending standards eased for all loan categories relative to the July 2020 survey. 

Additionally, banks were asked to report when standards reached their easiest and tightest points since 2005. Most banks reported that standards were easiest between 2005 and 2007 and tightest between 2008 and 2010, indicating that the ranges of standards in consideration have not changed significantly since 2011—the first year that special questions on the levels of standards were asked. 

The full survey may be viewed on FRB's website.

By, Cassie Krause