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) - Banks have finally begun to open up their loan spigots to businesses as losses have started to abate - though consumers with less-than-perfect credit will have to wait awhile before getting broader access to borrowing.

According to a quarterly survey released on Monday by the

Federal Reserve

, senior loan officers at U.S. banks have been easing standards and terms for commercial and industrial loans for the past several months. The bigger the business requesting a loan, the more likely banks were to want their borrowing business.

The industry is responding to several factors, according to the Fed survey, including a low rate environment, stronger demand, increased competition and a brighter outlook for 2011 results.

"Between 20 percent and 30 percent of respondents also cited reductions in defaults by borrowers in the public debt market, increased tolerance for risk, and industry-specific improvements," said the Fed.

By contrast, standards for commercial real-estate loans were largely unchanged as lenders continue to face losses on those portfolios. CRE debt, much of which pertains to malls and retail shops, is closely correlated to consumer demand, which is still in the dumps due to high unemployment. Loan officers did say, however, that demand for CRE loans was stronger than it has been since 2006 and loan tightening was less stringent than it had been in previous periods.

Similarly, the Fed survey showed that loans to households were "small and mixed." Some banks eased terms for new credit-card applications, but others tightened terms on existing credit-card accounts, leveling out the positive changes. Standards for nontraditional mortgages - those that don't meet "conforming standards" set by government agencies - tightened at about 15% of the banks surveyed.

The difference in lending standards reflects banks' outlook for different types of borrowers. About 80% of loan officers said they expect C&I loan books to improve, while only 50% expect consumer-related portfolios to improve. The riskier the type of loan, the less optimistic they are: Just 20% of respondents expect non-traditional loans to perform well this year.

Additionally, the Fed said, large banks were "somewhat more likely" than small banks to report expectations of improvement in the quality of residential real estate loans.

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The Fed surveyed 57 domestic banks and 22 U.S. divisions of foreign banks in this survey, which pertained to the three months ending Dec. 31.

-- Written by Lauren Tara LaCapra in New York


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