Senior Loan Officer Opinion Survey Q4 2020

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The most recent edition of the Federal Reserve Board’s Senior Loan Officer Opinion Survey Practices addresses changes in the standards and terms on, and demand for, bank loans to businesses and households in the last quarter of 2020.

Survey respondents (banks) reported a tightening of standards of both Commercial and Industrial (C&I) loans and Commercial Real Estate (CRE) loans to firms of all sizes. There was also weaker demand reported for C&I and CRE loans. In the third and final major category of loans, Residential Real Estate (RRE) loans, banks left standards unchanged but reported either somewhat strengthening or unchanged demand.

For CRE loans, compared to the third quarter of 2020, while there was a significant reduction in tightening of standards across its three subcategories, on net, there was an overall tightening. In multifamily CRE lending, for example, 20.8% more banks reported that they had tightened standards in the fourth quarter, while in the third quarter, close to 45% more banks were reporting a tightening for multifamily CRE loans than those that were not1. “Multifamily CRE” is used to describe residential properties with more than five units.

Meanwhile, banks reported, on net, greater demand in all the three subcategories of CRE loans, compared to the third quarter of 2020. While more banks, on net, in the construction and land development and nonfarm nonresidential lending subcategories, reported weaker demand, a slight net positive share of banks reported stronger demand for multifamily CRE loans.

The most recent edition of the SLOOS survey also included a special set of questions asking banks’ expectations of lending standards for select categories of C&I, commercial real estate, residential real estate, and consumer loans to change over 2021. Many banks reported that, for CRE loans, their standards would remain unchanged, with a moderate net share of banks’ reporting a tightening of standards. The same was true of the Residential Real Estate category except with a moderate net share of banks’ reporting an easing of standards. Also, a moderate net share of banks’ reported expectations of demand in 2021 to strengthen across the major loan categories. However, a sizable net share of banks also reported expectations of deterioration in the quality of residential loans, including multifamily residential loans (the prior-mentioned subcategory of CRE lending), as measured by their outlook on delinquencies and charge-offs.


  1. As noted from an old working paper from the Richmond Fed, the survey is qualitative, rather than quantitative, focusing on loan officers’ judgments about recent changes in their banks’ non-price lending practices. The persistent reports of tighter credit conditions over the history of the survey make the survey’s absolute numerical results (i.e., the net percentage of banks’ tightening) difficult to interpret.  To some extent, though, the pattern of the reports of tightness across business cycles means that the survey’s results are most meaningful when viewed to those from previous periods.


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