California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

The Federal Reserve released its latest quarterly survey of bank lending practices. 
It found a high number of banks reporting tighter credit standards across a broad range
of loan products. Nearly 60 percent of banks responding to the survey said they had
tightened lending standards on credit card debt and 65 percent said they had tightened
lending standards for other types of consumer loans over the past three months.

The Fed survey found 70 percent of the banks responding said they had tightened lending
standards further for prime mortgages. That was on top of 75 percent who were tightening
such standards in the previous survey. The latest results for that area covered 52 institutions
that account for about 78 percent of residential real estate loans as of June.

The latest Fed survey was conducted in the first two weeks of October, too soon to reflect
possible effects of the government's program to inject about $250 billion into U.S. banks by
directly buying shares in them as part of a broader financial rescue effort. The government
also plans to buy billions in distressed mortgage-related assets that banks hold.

The Fed survey of 55 domestic banks and 21 U.S. offices of foreign banks found that sizable
percentages of banks had "continued to tighten their lending standards and terms on all major
loan categories over the previous three months."

I am Tim Johnson and this has been the California Business Minute.