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Fed Survey: Banks Tightened Lending in Q3

The ""Federal Reserve"":http://www.federalreserve.gov released its quarterly survey on lending practices yesterday, and it showed that 95 percent of banks have tightened their lending standards on at least some forms of loans. The survey of 55 domestic banks and 21 U.S. offices of foreign banks revealed that the majority of banks say they have ""continued to tighten their lending standards and terms on all major loan categories over the previous three months.""
Business and credit card lending was most affected by the crunch. However, the survey revealed that banks have adopted tighter standards for all kind of loans, including mortgages. Large majorities of banks reported tighter lending standards on prime mortgage loans, as well as nontraditional mortgage loans and subprime mortgages granted to borrowers with weak credit histories, further extending the credit freeze marked by the bursting of the housing bubble.
The Fed's survey was taken during the first two weeks of October, so its results don’t reflect the government's most recent efforts to thaw credit markets and encourage resumed lending to families and small businesses, including capital injections of $250 billion into major and community financial institutions.
To view the Federal Reserve's full survey results, ""click here"":http://www.federalreserve.gov/boarddocs/SnLoanSurvey/200811/.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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