Banks continued to tighten their lending standards for the second consecutive year as the economy continues to deteriorate, according to a survey by the Office of Comptroller of the Currency released Tuesday.

In the OCC's 15th annual underwriting survey, bank examiners found that underwriting standards tightened in 86% of the largest 59 banks surveyed. That is up from 52% of banks that reported tightening standards in 2008.

Examiners attributed the increase to the poor economy, decline in real estate market values, changes in risk appetite, and the performance and quality of the loans.

Commercial real estate experienced the largest tightening from 96% of the banks. Of those, loans to large-scale home builders led with 92% tightening, followed by commercial construction with 80% and other CRE at 76%.

Despite the tightening of standards, 37% of banks in the survey increased loan production since the 2008 survey and 31% saw no measurable change in loan volume.

The survey covered the 59 largest national banks over a 12-month period that ended March 31, 2009. The aggregate total of loans was $3.6 trillion.

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