But a set of special questions in the July survey does give a sense of to what degree it is happening.

Respondents were asked to identify a midpoint of underwriting standards between 2005 and the present and then compare that midpoint to the current underwriting standards.

In short, underwriting standards are tighter today than the midpoint of that time period, including among foreign banks. The survey said that:

A significant percentage of domestic banks reported, on balance, that current levels of standards are tighter than the respective midpoints on loans for construction and land development purposes, while moderate net fractions of domestic banks reported that current levels of standards are tighter than the respective midpoints on loans secured by nonfarm nonresidential properties and multifamily residential properties in the July 2016 Senior Loan Officer Opinion Survey.

Likewise for foreign lenders, the survey said.

A major percentage of foreign banks reported, on balance, that levels of standards are currently tighter than the respective midpoints on loans for construction and land development purposes, while significant net fractions of foreign banks reported that levels of standards are currently tighter than the respective midpoints on loans secured by nonfarm nonresidential properties and multifamily residential properties.

Regulators Sound Warnings

This survey is one of the few indications that banks are paying heed to the warnings US regulators have been giving banks about commercial real estate.

Most recently, the US Comptroller of the Currency Thomas Curry said he was keeping a closer eye on CRE lending with the release of the regulator's Semiannual Risk Perspective for Spring 2016.

He noted that at this stage of the cycle, there is “strong loan growth combined with easing underwriting to result in increased credit risk. While leveraged lending and auto lending remain concerns, CRE lending and concentration risk management has become an area of emphasis for regulators.”

Despite these warnings, banks showed little inclination to scale back on CRE lending in the first quarter of the year.

WASHINGTON, DC—Domestic bank respondents told the Fed that their lending standards for CRE loans of all types tightened during the second quarter, singling out construction and land development loans and loans secured by multifamily properties, according to the July 2016 Senior Loan Officer Opinion Survey on Bank Lending Practices.

By contrast, "all" of foreign banks surveyed by the Fed reported leaving CRE lending standards basically unchanged.

Unfortunately, the survey does not publish specifics, such as how exactly standards are tightening.

Special Questions Adds A Little More Detail

But a set of special questions in the July survey does give a sense of to what degree it is happening.

Respondents were asked to identify a midpoint of underwriting standards between 2005 and the present and then compare that midpoint to the current underwriting standards.

In short, underwriting standards are tighter today than the midpoint of that time period, including among foreign banks. The survey said that:

A significant percentage of domestic banks reported, on balance, that current levels of standards are tighter than the respective midpoints on loans for construction and land development purposes, while moderate net fractions of domestic banks reported that current levels of standards are tighter than the respective midpoints on loans secured by nonfarm nonresidential properties and multifamily residential properties in the July 2016 Senior Loan Officer Opinion Survey.

Likewise for foreign lenders, the survey said.

A major percentage of foreign banks reported, on balance, that levels of standards are currently tighter than the respective midpoints on loans for construction and land development purposes, while significant net fractions of foreign banks reported that levels of standards are currently tighter than the respective midpoints on loans secured by nonfarm nonresidential properties and multifamily residential properties.

Regulators Sound Warnings

This survey is one of the few indications that banks are paying heed to the warnings US regulators have been giving banks about commercial real estate.

Most recently, the US Comptroller of the Currency Thomas Curry said he was keeping a closer eye on CRE lending with the release of the regulator's Semiannual Risk Perspective for Spring 2016.

He noted that at this stage of the cycle, there is “strong loan growth combined with easing underwriting to result in increased credit risk. While leveraged lending and auto lending remain concerns, CRE lending and concentration risk management has become an area of emphasis for regulators.”

Despite these warnings, banks showed little inclination to scale back on CRE lending in the first quarter of the year.