WASHINGTON — Fewer banks tightened standards on business and household loans in the second quarter, according to a Federal Reserve survey that stands as another sign the recession is easing.

The survey, released Monday, shows that some banks continued to make it even more difficult for consumers and companies to obtain credit in the second quarter. It also indicates that most banks expect lending standards to remain tighter than average until at least the second half of 2010.

However, in a hopeful sign of recovery, the report shows the number of banks tightening their lending policies is steadily declining.

"In the July survey, domestic banks indicated that they continued to tighten standards and terms over the past three months on all major types of loans to businesses and households, although the net percentages of banks that tightened declined compared with the April survey," the survey said.

Additionally, the fraction of domestic banks reporting weaker demand for certain types of loans was slightly lower than that in April. Demand for commercial and industrial loans, and home equity lines of credit were slightly lower than in April, while loan demand for commercial real estate and non-traditional residential mortgages was about the same. Also, loan demand for consumer loans was slightly higher than in the April survey.

The report, officially called the Senior Loan Officer Opinion Survey on Bank Lending Practices, provides a window into banks' lending policies and is reviewed for signs that the credit crunch is abating.

Monday's report is based on responses from 55 domestic banks and 23 U.S. branches of foreign banks. Participating firms received the survey on or after July 14; responses were due July 28.

About 30% of domestic responses reported that they tightened standards on loans to large businesses in the second quarter. That's about 10 percentage points lower than in the April survey. It's also much lower than the November 2008 survey, which showed that roughly 85% of domestic banks tightened their standards on so-called commercial and industrial loans to large firms.

Additionally, 35% of the respondents reported that they tightened standards on C&I loans to small firms - that's down from more than 40% in April and down from 70% in January.

However, the fraction of banks that tightened standards for commercial real estate, CRE, loans fell to about 45%, compared to 65% in April. But this decline remains higher than fractions that reported tighter standards for C&I loans and within most consumer lending categories.

According to the survey, with regards to CRE lending standards, nearly all banks said "current standards were tighter than their longer-term average levels."

About 40% of survey respondents expect CRE standards to return to longer-term average levels by the second half of 2010 or in 2011.

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