Perhaps in response to increased regulatory scrutiny of commercial real estate loans, banks tightened standards on CRE loans during the fourth quarter, according to the Federal Reserve’s latest senior loan officer survey of bank lending practices.

Meanwhile, banks left standards for commercial and industrial (C&I) loans largely unchanged, according to the Fed’s survey.

Bankers reported that demand for C&I loans from large and middle-market firms, alongside small firms, was little changed, on balance, while a moderate net fraction of banks reported that inquiries for C&I lines of credit had increased, the Fed said.

Where commercial real estate was concerned, a modest net fraction of bankers told the Fed that demand for construction and land development loans, as well as loans for multifamily residential properties, had weakened. Loans secured by nonfarm nonresidential properties reportedly remained basically unchanged on net.

Standards for all categories of residential real estate had remained basically unchanged, though demand for most types of home purchase loans weakened during the fourth quarter.

This iteration of the Fed’s survey included two sets of special questions concerning banks’ outlook for lending policies and loan performance over 2017. On balance, banks said they expect to ease standards on C&I loans and for the asset quality of those loans to improve somewhat this year.

By contrast, banks expect to tighten standards on commercial real estate loans, while they expect the asset quality of most major CRE loan categories to remain unchanged on net.

Banks said they expect to ease standards and to see asset quality improve somewhat for most residential real estate home-purchase loan categories. Banks also said they expect to tighten standards on auto loans and to see asset quality of both auto and credit card loans deteriorate somewhat this year.