MINNEAPOLIS — In a quarterly survey of bank risk professionals, FICO discovered that while pessimism among these executives remain, apparently things are getting better as the results are less negative than the second quarter.

Looking specifically at bank risk officers who specialize in auto loans, FICO discovered what it is calling a "somewhat unexpected survey result." Apparently, bank risk officers who specialize in auto loans and credit cards had a "particularly negative outlook about their own sectors."

According to FICO, "Among bankers who manage auto loans, 96 percent expect delinquencies on auto loans to increase or remain the same. Less than 4 percent expect delinquencies to drop."

Meanwhile, as for bankers who manage credit cards, almost 85 percent expect delinquencies on credit cards to increase or remain the same, while about 15 percent expect delinquencies to decline.

Overall, when asked about expected delinquency rates for several types of credit products, many bankers said they expect delinquencies to climb. This includes home mortgages (53 percent anticipate increase, while 14 percent expect decrease), credit cards (42 percent expect an increase), small business loans (47 percent expect growth) and student loans (49 percent foresee an increase).

Ultimately, the survey found "strong evidence of a credit gap for U.S. consumers as lenders expect credit availability to fall short of consumer demand through the end of 2010."

The survey revealed that 73 percent of 235 participants expect the volume of credit applications to increase or remain steady over the next six months. On the other hand, 46 percent of participants expect approval criteria for credit to get stricter, and only 14 percent expect criteria to be loosened.

Moreover, 38 percent of bankers questioned expect the approval rate for credit applications to decline, while only a quarter of those surveyed expect a higher approval rate.

Discussing the results, Andrew Jennings, chief research officer at FICO and head of FICO Labs, pointed out, "Although the outlook isn't as pessimistic as it was earlier this year, it's clear we still haven't reached the point of equilibrium between supply and demand for consumer credit.

"Banks remain concerned about loss prevention. Government data released in August indicates personal bankruptcies are at their highest levels in five years, and other recent data confirms the ongoing challenges in the employment and housing sectors. This type of economic environment makes it difficult for lenders to open up the flow of credit without taking on significant risk," he continued.

Apparently, the evidence of a credit gap is also consistent with other research by FICO Labs, which recently examined credit data compiled in the 12 months ending in April 2010. For those 12 months, the number of new credit cards opened by consumers declined 17.7 percent, compared to the prior 12 months. On the other hand, the number of inquiries for new credit dropped by only 3 percent during that time. Officials said this indicates that consumers were unable to access all of the credit they were seeking. The earlier study also found that the total amount of credit available on all U.S. consumer credit cards fell by 12.2 percent.

When comparing the most recent results to those of the second quarter, the overall impression by FICO is that while bankers appear to be remaining pessimistic, they are less so. For example, while 53 percent of those questioned expect mortgage delinquencies to rise, that figure was 60 percent in the second quarter. Additionally, the percentage of participants expecting an increase in credit card delinquencies fell from 59 percent to 42 percent. The percentage of all respondents expecting an increase in delinquencies on auto loans fell from 41 percent to 30 percent.

The survey was conducted for FICO by the Professional Risk Managers' International Association.

And in reviewing the results, PRMIA member professor Russell Walker, of the Zell Center for Risk Research at Northwestern University's Kellogg School of Management, said, "With banks still seeing a rather negative outlook, we expect a lot of unmet demand in consumer credit for some time. However, as economic conditions in the U.S. continue to improve, this unmet demand provides banks with a potentially profitable opportunity that will require a strong risk management approach for offering credit."