Survey: Banks tighten lending

The majority of banks in the United States have tightened their lending standards, ranging from consumer credit account limits to business loans, according to the Federal Reserve’s quarterly survey of senior loan officers.

Approximately 60 percent of banks have decreased credit limits on commercial construction; 30 percent have reduced the account limit on business credit cards; and 50 percent have reduced credit lines to financial firms.

Approximately 65 percent of banks said they are tightening lending standards and reducing the size and maturity of credit on commercial and industrial loans to middle- to large-market companies.

Part of the reason for the drop is a reduction in demand for commercial and industrial-related funding.

Banks that noted an increase in business said their customers had left other sources of funding in favor of banks, according to the Federal Reserve’s survey.