A moderately larger share of banks surveyed this summer said they eased standards for auto loans in the second quarter, according to Federal Reserve data.
The Fed’s survey of senior loan officers asked bankers to report changes in behavior over the previous three months — essentially, to compare the second quarter of 2021 with the first.
According to the Fed, 11 of the 59 responding banks, or 18.6%, felt the standards had eased somewhat.
Most bankers said they had not changed their practices. But a few lenders said they had relaxed maximum terms and lowered minimum down payments. Seven banks reported accepting lower credit ratings, although another bank reported raising its minimum. Five banks said they had reduced the range of interest rates offered to customers, also indicating more flexible credit, while three others said they had increased this range.
Consumers demonstrated higher demand for auto loans during the second quarter, from the perspective of loan officers. Of the 59 loan officers who responded to the question, 21 felt that demand had increased moderately or substantially over the past three months. Five bankers rated demand as moderately weak. The rest saw no change.