Summary
A record number of loan applications were rejected by banks last month, as reported by the New York Federal Reserve. This rise in rejections is linked to economic challenges like rising inflation and tariffs. Banks are being more cautious in their lending due to these conditions.
Key Facts
- The New York Federal Reserve reported that nearly one in four credit applications was rejected in October.
- There is an increase in auto loan rejections and nonperformance of subprime debts.
- Higher interest rates have made debt-to-income ratios exceed what lenders allow.
- Banks have become more protective of their finances since the pandemic.
- New tariffs could increase costs for consumers, especially during the holiday season.
- Banks are rejecting loans not because applicants are riskier but because financial conditions have worsened.
- Stricter lending means loans will be harder to get unless applicants have strong credit histories.
