By The Associated Press
WASHINGTON — Banks are more willing to make loans to consumers than any time in the past 17 years, according to a survey released by the Federal Reserve on Monday. Several large banks have already eased lending policies on credit card and auto loans, according to the Fed’s Senior Loan Officer Survey for January through March.
Consumer demand for auto loans did improve in the first quarter, the survey found. But demand was little changed for credit card loans and other consumer loans. Demand for home mortgages continued to decline.
The Fed’s survey is watched closely by financial markets to get a sense of whether credit is flowing in the economy. The deep recession was due in part to the slowdown in credit after the housing bubble burst.
Many economists don’t think the sector has returned to normal.
The survey found that the trend toward easier standards and terms for commercial and industrial loans continued in the first quarter. This is the sixth straight survey that found such easing.
Some banks that eased standards on business loans cited increased competition while others pointed to a less-uncertain economic outlook.
Demand for business loans did increase in the first quarter, the survey said. Larger firms were more interested in credit than small firms.
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