February 2, 2015 / 7:07 PM / in 3 years

Fed loan survey cites worries in oil and gas sector

WASHINGTON (Reuters) - Banks that tightened lending standards in the United States cited concerns about the oil and gas sector, according to a quarterly survey of loan officers conducted by the Federal Reserve.

The United States Federal Reserve Board building is shown behind security barriers in Washington, in this October 28, 2014 file photo. REUTERS/Gary Cameron/Files

The survey respondents reported little change in standards on commercial and industrial (C&I) loans, and also said modest fractions of large banks experienced stronger demand for auto and credit card loans.

The Fed survey covered the last quarter of 2014, and included the responses of 73 domestic banks and 23 U.S. branches and agencies of foreign banks.

Though the loan officers reported lending conditions as largely unchanged, banks that did tighten conditions cited concerns about specific industries, particularly those in the energy sector, given the steep drop in oil prices.

“Banks which reported having tightened either their standards or terms on C&I loans predominantlypointed to industry-specific problems as the main reason for having tightened their lending policies to nonfinancial businesses,” the survey said.

About one-third of the banks that originate subprime auto loans expected delinquency and charge-off rates to increase in 2015.

Reporting by Michael Flaherty; Editing by Andrea Ricci

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