WASHINGTON, DC – As the U.S. economy dove deeper into recession amid the coronavirus pandemic in the second quarter, more than half of banks reported weaker demand for commercial and industrial loans, according to the Federal Reserve’s latest survey of senior loan officers.
As client demand for commercial real estate and consumer debt demand also plummeted, low-interest rates drove demand higher for mortgage loans.
More than seven in ten banks reported tightening standards on credit cards — mostly by cutting credit limits, increasing minimum credit scores and limiting exceptions — and the long-running trend on auto loans accelerated sharply, with 55 percent of banks tightening during the second quarter.
Nearly two-thirds of banks also reported falling demand for credit card loans, while nearly half said demand fell for car loans.
(SOURCE: American Bankers Association)