Underwriting Standards Continue To Ease: OCC Survey

Responding to competitive pressures, abundant liquidity, and the desire for yield in the low interest rate regime, banks have eased underwriting standards and enhanced levels of credit risks, reports an OCC survey.

The Office of the Comptroller of the Currency’s 20^th Annual Survey of Credit Underwriting was released on Dec. 16 after the agency compiled observations of examiners and assessments of credit underwriting standards. The survey covered loans totaling $4.9 trillion and constituting approximately 94% of all loans in the federal banking system.

Easing of underwriting standards for third consecutive year

According to the survey, for the third consecutive year, underwriting standards have been eased within both commercial and retail products. The survey notes that as banks continue to reach for volume...