Banks loosening grip on credit cards, says Fed survey
Senior loan officers say demand for cards rising, too
Credit card issuers continue to get more generous with new cards, while demand for cards continues to strengthen -- but subprime applicants still feel a chill.
That's the picture from the Federal Reserve's latest survey of senior loan officers, released Monday. While consumer lending practices were mainly unchanged in the past three months, "a few large banks had eased standards, increased credit limits, and reduced the minimum required credit score for credit card loans," the quarterly survey said.
Based on a survey of 75 U.S. banks, the quarterly analysis found:
- Seven of 54 said they "eased somewhat" credit standards for new card applications, while the rest said standards were basically unchanged. Results for auto loans and other consumer loans tracked closely with credit cards.
- Six of 52 said they "eased somewhat" the minimum required credit score for card holders, but only one said it eased standards for granting cards to applicants who did not meet credit score standards.
- Thirteen of 50 said demand for cards was "moderately stronger," while only three saw demand as "moderately weaker."
Not all banks answered all questions.
Attitudes toward subprime card customers have not entirely thawed, the survey indicated. Asked about the period from 2005 to the present, only three banks of 20 said standards are easier than the average, and eight said standards are tighter. Nine said standards now are about average for the period.Prior survey: Banks expect credit to ease near pre-recession levels
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