When the Federal Reserve Monday released its quarterly survey of Senior Loan Officers, gardeners -- those looking for "green shoots" -- were quick to embrace it noting fewer lenders reported tightening their lending standards than those who responded to the last quarterly survey released in February. This quickly morphed into a view lenders were easing.

It’s important here to understand how the results of the quarterly survey are reported. The Federal Reserve asks a variety of questions about lending standards for a wide range of loan products. It also asks lenders to assess demand for loans.

The questions are fairly straightforward:

“Over the past three months, how have your bank’s credit standards for approving applications for (fill in the loan type) from (individuals, households or businesses) changed?

• Tightened considerably
• Tightened somewhat
• Basically remained unchanged
• Eased somewhat
• Eased considerably

The results represent the difference between the sum of the first two responses and the last two. The middle response, “basically remained unchanged,” is ignored. Arithmetically, it can mean if 75% of respondents chose the first two answers and 25% the last two, it would produce the same reported result as if 50% of respondents chose the first two answers and 50% the third. In each example, a “net” 50% would be reported as tightening credit standards. While that is correct statistically, how we got there is different -- and matters.

So it was with Monday’s report. While for most loan categories a smaller percentage of lenders were tightening standards than had been reported as doing so three months ago, none responded to the survey by saying they had eased loan terms or criteria.

Let’s think about that too. From where did banks tighten lending terms? If no lenders had eased terms in the last few surveys -- and none did -- going into the survey which was released Monday, already tight credit standards were made still tighter.

This trend helps to explain the report Thursday from the Federal Reserve on consumer credit outstanding -- credit card and term loans, the latter usually associated with auto loans.

According to the Federal Reserve report, consumer credit outstanding fell a record $11.1 billion in March and data for the prior two months were revised lower. All in, consumer  credit has grown by an average of only $0.2 billion per month or 0.1% in the last 12 months, the slowest year -year growth rate since September 1992.

Revolving debt -- essentially credit cards -- fell $5.4 billion, reflecting a drop in retail sales in March and the tighter lending standards with banks requiring higher credit scores and increasing the minimum percent of the outstanding balance to be paid each month. Again, according to the loan officer survey, no lenders eased terms.

As significantly, 54.5% of lenders said they had decreased credit card lines, while only 3.0% said they had increased them. It’s no surprise then than that in the past year, revolving debt has fallen by an average of $0.9 billion per month -- or 1.2% -- the slowest year-on-year growth rate since record keeping began in 1968.

With banks increasing under stress, the prospects for easier credit, which fuels consumer spending -- in the near term -- are bleak, threatening to prolong the recession. 

Mark Lieberman is the senior economist for the Fox Business Network. Prior to joining FOX, he served as first vice president and manager of economic analysis and research at Washington Mutual in New York. Before that, he served as senior vice president at Dime Savings Bank of New York (which was later acquired by Washington Mutual), where he specialized in credit and risk management. He is a member of the Executive Committee of the New York Association for Business Economics. He has a degree in Economics from the Wharton School of the University of Pennsylvania.