A Federal Reserve study has found that banks are easing lending due to increased consumer demand. Running from July 1 to July 15, the survey included responses from 75 domestic banks as well as 23 U.S. units of foreign banks, Bloomberg News explains.
Increased lending has particularly benefited those seeking industrial and commercial loans, including in real estate. Banks saw an increased demand for these types of loans, and institutions have eased their lending standards terms for them, the Federal Reserve said. Domestic banks have also eased their lending standards for commercial real estate loans.
However, consumer lending experienced less improvement, with only "moderate fractions" of banks citing increased demand for consumer loans, including those for credit cards and automobiles.
The home lending market has also only seen limited growth. Lack of pristine credit remains an obstacle for many homeowners. In a June press conference, Federal Reserve Chair, Janet Yellen, explained, "It is difficult for any homeowner who doesn't have pristine credit these days to get a mortgage."
One concern Federal Reserve officials have raised is the nature of competition among some banks. "We have seen signs of reaching-for-yield behavior in the leveraged loan market, subprime auto lending and corporate bonds," Esther George, who serves as the Federal Kansas City Bank President, asserted in a mid-July speech.
Despite uneven growth in the lending market, record lending has helped produced one very important result: Economic growth in the second quarter. This follows first quarter contraction due to harsh winter weather.
Record lending will also likely increase consumer demand for commercial loan software. Best-in-class solutions, including commerical loan calculators and amortization schedules, help businesses stay on top of their loans as well as save them time and money