The OCC's Examiner Survey of Credit Underwriting Practices: A New Quantification Scheme, and a Comparison with the Federal Reserve's Senior Loan Officer Survey

Abstract

Consumer lending continues to grow in importance for the banking industry, and consumer lending practices continue to make headlines, attracting the attention of consumer groups as well as policymakers, including in particular several Congressional committees. In this environment, supervisory authorities continue to hone their insights into the nature and consequences of consumer lending. Many different sources of information can aid in achieving this goal. This Staff Report focuses on information that has perhaps been underutilized: the OCC’s annual Survey of Credit Underwriting Practices (“Examiner” survey). One purpose of this paper is to explain how the analytical value of the Examiner survey can be enhanced via the application of a simple indexing scheme. The indexing scheme is patterned directly on that employed by the Federal Reserve for the quantification of information collected and published in its quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices (“Senior Loan Officer”survey). The second purpose of this Staff Report is to demonstrate the value of the indexing scheme by comparing the OCC’s Examiner survey with the Federal Reserve’s Senior Loan Officer survey. The focus in particular is on the credit card underwriting portions of both surveys; in effect, the comparison is between bankers’ perspectives (from the Federal Reserve survey) and examiners’ perspectives (from the OCC survey). Such a comparison is useful to ascertain the degree to which there is consistency between bankers’ and examiners’ perspectives.