Federal Reserve Survey of Lending Officers Finds U.S. Banks Reported Stricter Credit Standards in Q1 2024

According to the Federal Reserve’s “April 2024 Senior Loan Officer Opinion Survey on Bank Lending Practices,” released on Monday, many banks tightened their lending standards in Q1 of 2024.

“Over the first quarter, banks reported tightening lending standards and most terms, on net, for all consumer loan categories,” the report reads. “Significant net shares of banks reported tightening standards for credit card loans, while moderate and modest net shares of banks reported tightening standards for other consumer loans and auto loans, respectively.”

“A significant net share of banks reported increasing minimum credit score requirements for credit card loans, while moderate net shares of banks reported doing so for auto loans and other consumer loans,” the report continued. “Meanwhile, modest or moderate net shares of banks reported decreasing the extent to which loans are granted to customers not meeting credit scoring thresholds and increasing spreads of interest rates over the cost of funds for all consumer loan categories. Other queried terms and conditions were left unchanged across these loans, on balance, with the exception of credit limits for credit card loans, which a significant net share of banks reported having tightened.”

In addition to car loans, credit cards, home equity loans, and other consumer loans, banks also tightened standards on commercial and industrial loans and commercial real estate loans. The Federal Reserve’s survey included responses from 66 domestic banks and 20 U.S. branches and agencies of foreign banks. The survey was conducted between March 25 and April 8.