Lending Standards Got Tougher in Third Quarter: Fed Survey

An increasing number of banks tightened their lending standards for consumer and commercial loans during the third quarter, according to the Federal Reserve’s October 2007 Senior Loan Officer Opinion Survey on Bank Lending Practices release yesterday.

Domestic banks reported tighter lending standards and terms on consumer loans other than credit card loans, as well as tighter lending standards on prime, nontraditional, and subprime residential mortgages during the third quarter. Lending standards on credit card loans were, by contrast, little changed. Demand for residential mortgages and consumer loans of all types had reportedly weakened, the survey said.