With consumer chargeoffs nearing their peak of the early 1990s, bankers are cutting back on installment credit, a Federal Reserve Board survey of senior loan officers indicated.

The Fed made a similar finding in the last of its period loan-officer surveys three months ago. Not since 1981 have two consecutive reports shown bankers to be less willing to make consumer loans.

Two-thirds of the 54 banks in the latest survey said they are writing off consumer loans faster than expected, given past experience and current delinquency levels.

The main difference this time, the Fed concluded, is that more customers are declaring bankruptcy after spending little or no time in delinquency.

James H. Chessen, chief economist at the American Bankers Association, noted that the industry's outstanding consumer debt totaled $504.9 billion on June 30, down from $507.4 billion at yearend 1995. Even credit card loans fell during the six months, to $204.7 billion from $210.3 billion.

"It shows the considerable restraint by the banking industry," he said. "They've held the level of consumer lending flat."

Banks charged off 2.14% of their consumer loans in the first quarter, compared with 2.18% in the first quarter of 1991, according to the Federal Deposit Insurance Corp.

In contrast, consumer delinquency rates stood at 1.25% on March 31, much lower than the 1.47% posted in early 1991.

FDIC Chairman Ricki Helfer warned bankers in June that the a sharp increase in bankruptcies could portend higher chargeoffs.

Cautions from regulators are having an impact, Mr. Chessen said, but he added that the agencies risk setting off a credit crisis like the one that pinched business borrowers in the early 1990s.

"I would hope we would not have that same regulatory-induced credit crunch for consumer lending," he said. "We should think about the 97% of the people that are managing their credit well."

The banks in the loan-officer survey have a combined $1.2 trillion of assets, about one-third the industry total. Nearly half of all banks surveyed, including 68.4% of the large banks, reported tightening standards on credit card applications.

A third of the banks reported lowering credit limits on new or existing accounts. Half of those that use credit scoring models said they raised cutoff scores for credit card applicants over the past year.

Warren Heller, research director at Veribanc Inc. in Wakefield, Mass., said stricter credit standards have yet to produce positive results.

"We haven't seen any evidence in the numbers that are out that the tightening has had any effect," he said.

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