Banks are easing some of their requirements for consumers and businesses to get new loans, according to a recent report by the Office of the Comptroller of the Currency, a federal government agency. But more of the easing applied to business loans than consumer.
The OCC Annual Survey of Credit Underwriting found that these requirements, known as "underwriting standards," are continuing to ease for both commercial, or business, loans; and retail, or consumer, loans.
Collectively, large banks reported the highest share of eased standards, the OCC said.
The loans for which standards were loosened the most included credit cards and large corporate, asset-based, international and leveraged loans. Home equity loans experienced the most tightened underwriting standards, the OCC said.
Other categories of loans in the survey included agricultural, commercial leasing, commercial and residential real estate construction, commercial real estate, small business, affordable housing, and residential first mortgages, according to the OCC report.
Banks continued to adapt to changing economic conditions and competition, easing underwriting standards and increasing loan volume, the OCC said.
In a statement, OCC Senior Deputy Comptroller and Chief National Bank Examiner John Lyons said the survey showed progress, but that regulators wouldn't be lax in their expectations for loan quality.
"As banks ease standards to improve margins and compete for limited loan demand, examiners will continue to monitor underwriting standards to ensure they are prudent and are applied consistently," Lyons said.
The perceived strength of the U.S. economy and expectations of future economic conditions, risk appetites and changes in regulatory policies were among the factors that influenced changes in bank underwriting, the report said.
Conducted annually, the OCC survey is intended to identify trends in bank lending standards. The recent survey included 86 of the largest U.S. banks and federal savings and loans, and covered the 18-month period that ended June 30, 2013.
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