Fed Reports Banks More Upbeat on Delinquencies and Charge-Offs
The Federal Reserve released the quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices for January 2011.
The Fed reports that “moderate to large fractions of banks reported they expected improvement in delinquencies and charge-off rates during 2011 in every major loan category.”
Large banks also appear to be more upbeat than other banks when it comes to credit card practices. Large banks are more likely to have reduced the required minimum credit score and the standards for approving applications.
Here are a few results of the survey:
* 21.7% of large banks say that credit standards for approving applications for credit cards from individuals eased somewhat over the past three months. None of the smaller banks reported this taking place.
* 22.7% of large banks say they have reduced the minimum required credit score on credit card loans over the last three months. None of the smaller banks reported this taking place.
* Almost 57% of all the banks say that loan quality on credit card loans will improve in 2011. Two-thirds of the large banks felt the loan quality would improve; 43.8% of the other banks felt this way.
This survey is based on responses from 57 domestic banks and 22 U.S. branches and agencies of foreign banks.
Link to the January 2011 Senior Loan Officer Opinion Survey on Bank Lending Practices