A Federal Reserve survey released yesterday showed that U.S. banks eased lending requirements amid a widespread increase in demand during the second quarter, Bloomberg News reported yesterday. “Survey results showed a continued easing of lending standards and terms for many types of loan categories amid a broad-based pickup in loan demand,” the Fed said yesterday in its quarterly survey of senior loan officers. The central bank surveyed 75 domestic banks and 23 U.S. units of foreign banks from July 1 to July 15. While “many banks reported having eased standards for prime residential real estate loans, respondents generally indicated little change in standards and terms for other types of loans to households.” Even with the lending increases, Fed Chair Janet Yellen said that tight credit has caused the housing recovery to be slow. “It is difficult for any homeowner who doesn’t have pristine credit these days to get a mortgage,” she said in June. Some Fed officials have become concerned that competition among banks in other markets could be getting overheated. “We have seen signs of reaching-for-yield behavior in the leveraged loan market, subprime auto lending and corporate bonds,” Fed Kansas City Bank President Esther George said in a July 15 speech.
