Two-thirds of banks in a survey said their credit scoring models failed accurately to predict loan-quality problems in their credit card portfolios, according to a Federal Reserve study released Tuesday.

The models understated delinquency, default, and bankruptcy rates and overstated the profitability of credit card portfolios.

"Nearly two-thirds of the respondents indicated that their models had been too optimistic over the past year, predicting better outcomes than actually occurred," the Fed said in its senior loan officer survey, a quarterly look at the U.S. operations of 60 large domestic and 24 foreign banks.

Banks attributed part of the trouble to a new willingness by consumers to declare bankruptcy, the survey found.

About half the banks with faulty models have revamped their credit scoring systems, and 60% have raised the cutoff score an applicant must meet to qualify for credit.

James H. Chessen, chief economist at the American Bankers Association, said the industry should not be concerned. "It is always necessary to adjust models to more accurately reflect the risks of lending," he said.

The survey also found:

*Credit card spreads increased at 20% of the surveyed banks. Also, nearly one-third of the banks reduced credit limits for existing customers, although few dropped them below a customer's outstanding balance.

*Household demand for credit fell at 12% of the surveyed institutions. Also, about 5% of banks tightened credit standards, and another 5% said they were less willing to make consumer installment loans. But 20% eased home-equity loan standards.

*Commercial and industrial loan standards for large, middle-market, and small businesses either held steady or fell since August. Fierce competition from banks and nonbanks were the top two reasons banks cited for reducing loan standards. Also, 20% of banks said loan demand had become more sensitive to rate changes since August.

*Spreads for small-business loans remained high by historical standards. Bankers attributed this to new technology, which lets them use risk-based pricing.

*Home mortgage loan standards tightened or remained steady at 87% of the banks surveyed. Banks were split over demand for mortgages: 12% reported greater demand; 24%, weaker.

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