Loan officers at U.S. banks reported easing standards on most business and household loans in the first three months of the year as more of the country reopened amid accelerating vaccination rates.
Standards on commercial real estate loans remained basically unchanged, while banks reported tighter standards for construction and land development loans, according to loan officers responding to the Federal Reserve survey released on Monday.
Demand, meanwhile, was weaker for business loans to large and mid-sized firms, and for nonfarm nonresidential loans, and was unchanged for business loans to smaller firms; while demand for construction, land development and multifamily loans rose, the survey showed.
The U.S. economy grew an annualized 6.4% in the first quarter, powered by consumer spending. The Fed survey showed that during the first quarter demand for home loans strengthened, while demand for credit card and other consumer loans remained unchanged.
Despite the recent easing trend, banks since the start of the pandemic have overall tightened both business and consumer credit policies, as well as for commercial real estate loans, the Fed reported. Big banks eased credit policies on loans to large, investment-grade firms, and small banks tightened standards especially for small and below-investment-grade firms.