Tags: US | Fed | Bank | Lending

Banks Not Imposing New Loan Hurdles; Demand Low

Monday, 01 Feb 2010 02:38 PM

 

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

Most banks aren't erecting new hurdles for people and businesses to get loans, a fresh sign credit problems are easing.

In a quarterly survey released Monday, the Federal Reserve found that "commercial banks generally ceased tightening standards on many loan types" at the end of last year. The one exception: commercial real-estate loans.

Even though banks aren't imposing new restrictions on most loans, they aren't ready to ease the tough loan standards put in place during the financial crisis. Banks "have yet to unwind the considerable tightening that has occurred over the past two years," the Fed said.

Meanwhile, demand for home mortgages and other consumer loans weakened, a sign consumers are leery of making big-ticket purchases given double-digit unemployment and the fragile economic environment.

Consumers will help support economic growth, but they won't lead it by going on spending sprees. That's one main reason why the recovery this year is supposed to be modest rather than booming.

Looking ahead, "significantly fewer" banks expected widespread deterioration in the value of the loans they hold this year, the Fed said. That's an improvement from the prior two years, the Fed said.

On the consumer end, some banks indicated that the credit quality of home equity loans and home mortgages held by prime borrowers would likely erode further in 2010. But many banks expected little deterioration in the value of other types of consumer loans.

Furthermore, banks are anticipating further erosion in the value of commercial real estate loans this year. Small banks have been especially hit by soured commerical real-estate loans. That's crimped lending to small businesses.

Normally during economic recoveries, small businesses play a key role in job creation. But problems getting credit have made it more difficult for small businesses to get the financing to expand operations and hire.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Ferguson Prosecutor: Some Witnesses Were 'Not Telling the Truth'

Friday, 19 Dec 2014 22:48 PM

Some witnesses who appeared before the grand jury investigating the death of unarmed black teenager Michael Brown were " . . .

Judge Dismisses Suit on Oklahoma Execution Access

Friday, 19 Dec 2014 22:40 PM

A federal judge on Friday dismissed a lawsuit filed by media organizations seeking greater access to the execution of Ok . . .

GOP Lawmakers Write Obama on Power Plant Pollution Regulations

Friday, 19 Dec 2014 22:06 PM

Ninety-six Republican lawmakers have signed a letter urging President Barack Obama to drop the Environmental Protection  . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved