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July 21 -- The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, with revisions, the Survey of Small Business and Farm Lending (SSBFL). The revisions are effective for the December 31, 2020, as-of date with the transmission period beginning on January 18, 2021, based on loan activity over the fourth quarter 2020.
 
The Survey of Small Business and Farm Lending (previously the Survey of Terms of Lending) collects unique information concerning price and certain non-price terms of loans made to businesses and farmers each quarter (February, May, August, and November). Analyses of the SSBFL data provide estimates of the cost of important segments of nonfarm business and agricultural credit at banks that are representative of banking institutions nationwide. Currently, it is the Federal Reserve‚Äôs only available source of data on bank loan pricing for individual loans of all sizes to nonfarm businesses and farmers. Since its inception in February 1977, the SSBFL has been periodically revised to accommodate changes in lending practices.  SSBFL components:
 
1) Small Business Lending Survey (FR 2028D) -- FR 2028D collects quantitative and qualitative information on loans to small businesses from a stratified sample of up to 398 banking institutions. The survey is administered at a quarterly frequency and distributed during the first month of each quarter. Survey responses are based on loan activity over the previous quarter. Quantitative information collected includes the aggregate number and dollar amount of outstanding loans and new loans extended by banks to small businesses each quarter, as well as line-of-credit drawdowns and the average interest rate. Loans are separated into two categories: term loans and lines of credit, with each category further separated into fixed rate and variable rate. Additionally, quantitative information on loan maturity and the use of interest rate floors is collected. The FR 2028D also collects quantitative information on applications approved during the survey quarter.

Qualitative information collected by the FR 2028D includes questions to gauge changes in lending terms, loan demand, and credit standards for small business loans during the survey period. Furthermore, respondents are asked to identify possible reasons for indicated changes in lending terms or credit standards. The survey also includes qualitative questions on the demand for small business loans, changes in credit line usage, and changes in the credit quality of small business loan applicants. Respondents are asked to identify potential factors underlying a reported change in applicant credit quality (e.g. credit scores, quality of collateral) and to identify top reasons for denying small business loans during the survey quarter.

2) Survey of Terms of Bank Lending to Farmers (FR 2028B) -- The FR 2028B collects unique information on lending terms for farm borrowers, and the availability of a historical series on farm lending frequently proves useful in addressing new questions that arise. The FR 2028B panel has an authorized size of 250 domestically chartered commercial banks. The panel of banks has been drawn from a random sample of banks stratified according to farm loan volumes since 1989. Since that time, the authorized size of the panel has been 250 banks, with 202 banks currently reporting. The number of respondents is less than the authorized size due to mergers among reporters and loss of respondents due to the voluntary nature of the panel.

3) Prime Rate Supplement to Survey of Terms of Lending (FR 2028S) -- The FR 2028S is completed by banks that file the FR 2028B. The prime rate, an administered rate, remains the base rate banks use to price a significant portion of the loans covered by the FR 2028B. The FR 2028S provides valuable information about variations in the prime-lending rate across banks, which can be considerable.

From the sample data, estimates of the terms of business loans and farm loans extended are constructed. The aggregate estimates for business loans are published in the Federal Reserve Bank of Kansas City's quarterly release, Small Business Lending Survey, and aggregate estimates for farm loans are published in the statistical release, Agricultural Finance Databook.
 
SSBFL Supporting Statement:  https://www.federalreserve.gov/reportforms/formsreview/FR%202028%20OMB%20SS.pdf
FR 2028 forms:  https://www.federalreserve.gov/reportforms/formsreview/FR%202028D%20Draft%20Form.pdf
FR 2028 reporting instructions:  https://www.federalreserve.gov/apps/reportforms/review.aspx
Federal Register notice: https://www.federalregister.gov/documents/2020/07/21/2020-15405/agency-information-collection-activities-announcement-of-board-approval-under-delegated-authority

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