Banks report tougher credit standards in wake of failures

May 8, 2023, 11:57 AM

FILE - The seal of the Board of Governors of the United States Federal Reserve System is displayed ...

FILE - The seal of the Board of Governors of the United States Federal Reserve System is displayed in the ground at the Marriner S. Eccles Federal Reserve Board Building in Washington, Feb. 5, 2018. A Federal Reserve report Monday, May 8, 2023, showed that banks raised their lending standards for business and consumer loans in the aftermath of three large bank failures, a trend that could slow the economy in coming months. (AP Photo/Andrew Harnik, File)
Credit: ASSOCIATED PRESS

(AP Photo/Andrew Harnik, File)

WASHINGTON (AP) — A Federal Reserve report Monday showed that banks raised their lending standards for business and consumer loans in the aftermath of three large bank failures, a trend that could slow the economy in coming months.

The report, known as the senior loan officers survey, asked banks if they have tightened their lending standards by taking steps such as demanding higher credit scores, charging higher interest rates, or other moves that altogether would make it harder for businesses and consumers to obtain loans.

About 46% of all banks said they had raised standards for business loans known as commercial and industrial loans, up from just under 45% in the previous quarter. That increase was not as dramatic as in previous quarters, but banks were tightening credit before the bank failures. A year ago, slightly more banks were easing credit standards than increasing them.

The survey respondents were 65 U.S. banks and U.S. branches of 19 foreign banks. The results were gathered from March 27 to April 7, well First Republic bank failed a week ago, the second-largest bank failure in U.S. history.

The Fed’s report said that mid-sized banks — those with assets between $50 billion and $250 billion, like the three banks that failed in March — were more likely to report tighter standards.

The banks also said they are restricting credit for most consumer loans, including auto and credit card lending and home equity lines of credit.

United States News

Associated Press

Hawaii allows more concealed carry after Supreme Court ruling, but tightly limits where guns allowed

HONOLULU (AP) — Hawaii Gov. Josh Green on Friday signed legislation that will allow more people to carry concealed firearms but at the same time prohibit people from taking guns to a wide range of places, including beaches, hospitals, stadiums, bars that serve alcohol and movie theaters. Private businesses allowing guns will have to post […]

19 hours ago

File - Women work in a restaurant kitchen in Chicago, Thursday, March 23, 2023. On Friday, the U.S....

Associated Press

US hiring, unemployment jump in May and what that says about the economy

The nation’s employers stepped up their hiring in May, adding a robust 339,000 jobs, well above expectations.

19 hours ago

Associated Press

Even Nebraska’s nonpartisan Legislature is divided from acrimonious 2023 session

LINCOLN, Neb. (AP) — The Nebraska Legislature has long prided itself on being a paragon of collegiality and function, as the only single-chamber, nonpartisan Legislature in the country. But after a vicious 2023 session in which the body of 49 lawmakers remained irreconcilably split, Nebraska’s statehouse is beginning to reflect broad, national discord. The acrimony […]

19 hours ago

Associated Press

Lawsuit alleging ex-deputy falsified arrest report settled for $250K

MOUNT VERNON, Wash. (AP) — A lawsuit filed by a Washington oyster farmer accusing a former county deputy of falsifying an arrest report and urging a person to lie during a domestic-violence investigation has been settled for $250,000. Gerardo Rodarte, the owner of Samish Gold Seafoods, sued Skagit County and former deputy Joseph Gutierrez in […]

19 hours ago

FILE - A person removes snow from the front of his driveway a few days after a winter storm rolled ...

Associated Press

Report: Buffalo’s snow-removal equipment, communications fell short during deadly blizzard

BUFFALO, N.Y. (AP) — Buffalo’s snow-removal fleet was no match for the historic Christmas week blizzard that left 31 people dead in the city, and officials fell short in issuing warnings and providing shelter, according to a report released Friday. The 175-page review of the city’s response by New York University’s Wagner Graduate School of […]

19 hours ago

Ramon Elias Suarez waits while he tries and fails to use an app to apply for asylum near the United...

Associated Press

US expands slots for asylum app at land crossings as demand overwhelms supply

HARLINGEN, Texas (AP) — U.S. authorities on Thursday expanded slots to seek asylum at land crossings with Mexico through a mobile app for the second time in less than a month, seeking to dispel doubts it isn’t a viable option. There are now 1,250 appointments daily at eight land crossings, up from 1,000 previously and […]

19 hours ago

Sponsored Articles

...

DAY & NIGHT AIR CONDITIONING, HEATING AND PLUMBING

Here are the biggest tips to keep your AC bill low this summer

PHOENIX — In Arizona during the summer, having a working air conditioning unit is not just a pleasure, but a necessity. No one wants to walk from their sweltering car just to continue to be hot in their home. As the triple digits hit around the Valley and are here to stay, your AC bill […]

(Photo: OCD & Anxiety Treatment Center)...

OCD & Anxiety Treatment Center

Here’s what you need to know about OCD and where to find help

It's fair to say that most people know what obsessive-compulsive spectrum disorders generally are, but there's a lot more information than meets the eye about a mental health diagnosis that affects about one in every 100 adults in the United States.

...

Day & Night Air Conditioning, Heating and Plumbing

Company looking for oldest air conditioner and wants to reward homeowner with new one

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

Banks report tougher credit standards in wake of failures