TBO.com - TBO is Tampa Bay Online

Banks Stingy On Lending

ADVERTISEMENT

The Associated Press

Published: February 3, 2009

WASHINGTON - Many banks have made it harder for borrowers to obtain all kinds of loans over the past three months despite a $700 billion federal bailout program and a flurry of other bold moves to stem the worst financial crisis to hit the country since the 1930s.

The Federal Reserve in its quarterly survey of lending practices released Monday found many banks reporting tighter credit standards across a broad range of loan products, from credit cards and home mortgages to business loans.

Nearly 60 percent of banks responding to the survey said they had tightened lending standards on credit card and other consumer loans, about the same share as in the previous survey released in November. And about 80 percent of domestic banks said they tightened lending standards on commercial real-estate loans, slightly less than the 85 percent that reported doing so in the previous survey.

All told, though, the proportion of banks that "reported having tightened their lending policies on all major loan categories over the previous three months stayed very elevated," the Fed concluded.

Greg McBride, senior financial analyst at Bankrate .com, predicted that banks, whose lax lending standards for mortgages contributed to the financial meltdown, won't rush to loosen lending standards.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT