Credit quality fell across the country in November despite efforts by banks to tighten underwriting standards, the Federal Reserve Board said Wednesday.

Bankers in New York, Philadelphia, Cleveland, Atlanta, and San Francisco saw a deterioration in consumer credit quality, the Fed said in the Beige Book, its periodic report of economic conditions. The Federal Reserve Bank of New York reported delinquency rates were rising at 31% of its banks.

The Federal Reserve Bank of Cleveland attributed an overall rise in credit card delinquencies to "fierce competition" for borrowers. Philadelphia and Richmond also reported more competition for consumer loans. Philadelphia and St. Louis noted the same phenomenon for business loans.

The Fed also found that banks in every region were either tightening credit standards or leaving them unchanged. At the same time, demand for loans was falling.

Wayne M. Ayers, chief economist at Bank of Boston Corp., said the findings were expected. "Banks have clearly become a bit more conservative," he said. "It's not surprising. We'll be heading into the seventh year of expansion next year, and while (expansions) don't die of old age, they do tend to lose some speed. Consumer indebtedness adds to that."

Overall bank lending grew in only Cleveland and Philadelphia. It was mixed in the other 10 regions. New York reported the sharpest decline in residential mortgage lending, down at 45% of its banks.

- John Shea, Medill News Service

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