WASHINGTON - Most banks expect their lending to remain tight through the second half of next year, with the exception of mortgage standards, which are loosening a bit, the Federal Reserve said yesterday.
Its latest survey found that about 20 percent of US banks tightened lending standards on prime home mortgages in the April-June quarter, down from about 50 percent in the previous quarter and a peak of about 75 percent a year ago.
Meanwhile, 45 percent of banks said they tightened standards on nontraditional mortgages, such as adjustable-rate loans with multiple payment options, down from 65 percent in the April survey and 85 percent a year ago.
Around 35 percent of US banks in the July survey reported tightening their lending standards for credit cards, down from nearly 60 percent in the previous survey and 65 percent a year ago.
“The report tells us that credit is not becoming more readily available, but also that the credit freeze is at least moving in the direction of a thaw,’’ said Joseph LaVorgna, chief US economist at Deutsche Bank Securities.
Getting banks hurt by the financial crisis to boost lending is critical to an economic recovery.
Most of the banks polled expect their standards for all types of loans to remain tighter than average levels over the past decade through at least the second half of 2010.