WASHINGTON, D.C. -

The January Senior Loan Officer Opinion Survey on Bank Lending Practices orchestrated by the Federal Reserve indicated about 29.4 percent of the banks that originate subprime auto loans expect delinquency and charge-off rates to increase this year.

Fed officials acknowledged this week that level is a somewhat smaller fraction of banks expecting that performance deterioration relative to a year ago. Meanwhile 70.6 percent of the banks that originate subprime auto loans indicated that loan quality is likely to remain around current levels.

For banks only participating in the prime credit space for their auto business, the percentage of institutions expecting delinquency and charge-off rates to climb this year is smaller, coming in at just 11.3 percent. By far the largest segment — 82.3 percent — believes loan quality is likely to remain around current levels while a smaller contingent — 6.5 percent — project that portfolio quality actually will likely improve somewhat this year.

The delinquency and charge-off survey data from the Fed arrived along with many of these same banks polled seeing about the same level of demand for auto financing during the past three months. While 67.2 percent are watching interest levels stay about the same, another 18.8 percent surveyed told the Fed that demand became moderately stronger during the last three months as the remaining 14 percent witness either moderate or substantially weaker demand.

As banks are seeing vehicle installment contract applications flow into their origination departments, the Fed survey highlighted that the majority hasn’t made notable changes to underwriting practices. Here is a breakdown of the majority questioned:

— Over the past three months, how has your bank changed the following terms and conditions on loans to individuals or households to purchase autos? A total 92.1 percent said metrics have remained basically unchanged.

— Minimum required down payment? A total 93.7 percent said metrics have remained basically unchanged.

— Minimum required credit score? A total 95.2 percent said metrics have remained basically unchanged.

— Maximum maturity? A total 92.1 percent said metrics have remained basically unchanged.

— The extent to which loans are granted to some customers that do not meet credit scoring thresholds? A total 98.4 percent said metrics have remained basically unchanged.

Also of note in the Fed’s latest survey, 88.9 percent of senior loan officers questioned said that the spreads of loan rates over the bank’s cost of funds has remained basically unchanged during the past three months.

The entire Fed survey can be downloaded here.