Willingness of Banks to Lend Hits 17-Year High

What's Hot

23 Upgrades Under $50 to Make Your House Look AwesomeAround The House

Trump Worth $10 Billion Less Than If He’d Simply Invested in Index FundsBusiness

Do This or Your iPhone Bill May SkyrocketSave

11 Places in the World Where You Can Afford to Retire in StyleMore

19 Moves That Will Help You Retire Early and in StyleFamily

What You Need to Know for 2017 Obamacare EnrollmentFamily

8 Things Rich People Buy That Make Them Look DumbAround The House

50 Ways to Make a Fast $50 (or Lots More)Grow

32 of the Highest-Paid American SpeakersMake

The 35 Two-Year Colleges That Produce the Highest EarnersCollege

5 DIY Ways to Make Your Car Smell GreatCars

Amazon Prime No Longer Pledges Free 2-Day Shipping on All ItemsMore

More Caffeine Means Less Dementia for WomenFamily

7 Household Hacks That Save You CashAround The House

5 Reasons a Roth IRA Should Be Part of Your Retirement PlanGrow

30 Awesome Things to Do in RetirementCollege

Beware These 10 Retail Sales Tricks That Get You to Spend MoreMore

According the Federal Reserve, banks are ready to embark on a lending binge. But they may be lacking a key ingredient: borrowers.

The following post comes from partner site LowCards.com.

Banks are ready to lend money once again. According to the Federal Reserve’s “Senior Loan Officer Opinion Survey on Bank Lending Practices” released yesterday, their willingness to make consumer loans rose to its highest level since 1994.

In the credit card industry, banks appear eager to approve credit card applications for new customers - but consumers don’t seem anxious to apply.

About 20 percent of banks reported having eased standards for approving credit card applications. However, consumer demand for credit cards remained flat, so only a small fraction of banks reported an increase in the number of credit card applications over the past three months.

Here are some findings of the quarterly Loan Officer Survey that was conducted in April…

  • 20.5 percent of all banks say lending standards for approving credit card applications have eased somewhat. That’s more than twice the percentage that relaxed standards in the fourth quarter of 2010.
  • The outlook was even brighter at large banks, where 34.8 percent say lending standards for approving credit card applications have eased.
  • But consumer demand for credit cards showed no net change: 8.3 percent of banks reported demand for credit card loans was stronger, but 11.1 percent of banks reported that demand for credit card loans was weaker.
  • There has not been any net change in credit limits: 5 percent of large banks reported they have tightened credit limits while 5 percent have eased credit limits.
  • 10 percent of large banks have eased the minimum required credit score.
  • 11 percent of all banks reported that the overall credit quality for credit card applicants has improved.

“There is a cycle to this. Credit card delinquencies and defaults continue to fall, reducing the risk of lending. This gives banks room to lend again,” says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. “But consumers seem reluctant to once again take the credit card plunge. Many consumers are still stinging from using too much credit before the economic downturn.”

The quarterly Senior Loan Officer Opinion Survey is based on responses from 55 domestic banks and 22 U.S. branches and agencies of foreign banks.  You can read it yourself at this page of the Federal Reserve’s site.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: Sam’s Club Reveals Details of Black Friday, 5 Other Holiday Sales

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,730 more deals!