Willingness of Banks to Lend Hits 17-Year High

Photo (cc) by The.Comedian

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.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

Don’t Pay for These 10 Things: They Are Free With a Library Card
Don’t Pay for These 10 Things: They Are Free With a Library Card

Before you spend another dollar on items and services like these, check with your public library.

20 Surprising Things You Can Sell for Extra Money
20 Surprising Things You Can Sell for Extra Money

From your closet to the beach, the trash you find may be someone else’s treasure.

7 Ways Coupons Waste Your Money and Time
7 Ways Coupons Waste Your Money and Time

Here’s why I hung up my scissors and quit clipping coupons.

11 Home Upgrades With the Best Payback in 2020
11 Home Upgrades With the Best Payback in 2020

The home remodeling projects that deliver the best bang for the buck tend to have one thing in common.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

9 Deep Discounts Available on Amazon This Friday
9 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.