Banks report tighter loan standards

Banks have tightened up further on all sorts of lending, including home mortgages, credit cards and business loans, as the worst financial crisis in seven decades took a bigger toll on the economy.

The Federal Reserve said Monday that its latest quarterly survey of bank lending practices found high numbers of banks reporting tighter credit standards across a broad range of loan products.

The Fed survey, conducted in the first two weeks of October, found a sizable percentages of banks had “continued to tighten their lending standards and terms on all major loan categories over the previous three months.”

The Fed found that 85% of U.S. banks responding to the survey said they had tightened lending standards for “commercial and industrial” loans, a major type of business loan, up from 60% in the June survey.

An even bigger proportion of banks, 95%, reported tighter standards for the lines of credit they extend to large and medium-size businesses.

A large number of banks reported they were tightening standards for credit cards and other types of consumer loans.