Nov 9 (Reuters) – U.S. banks tightened lending standards and loan terms on commercial loans in the third quarter, while demand for commercial loans dropped to its lowest in more than a decade as the coronavirus pandemic made businesses more cautious, according to a Federal Reserve survey released on Monday.
Banks also tightened standards on most forms of consumer credit, but demand there improved for loans for big-ticket purchases such as houses and automobiles, the Fed said in its quarterly Senior Loan Officer Opinion Survey.
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Most banks reported that the overall level of loans in forbearance did not exceed 5%, although in some categories such as residential mortgages and certain commercial real estate loans a significant net share of banks said forbearance levels were above 10%, the survey showed. Banks offered loan forbearance earlier this year when the COVID-19 pandemic forced business closures and tens of millions of layoffs.
Reporting By Dan Burns
Editing by Chizu Nomiyama
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