This paper examines the credit rationing debate using detailed contract information on over one million commercial bank loans from 1977 to 1988. While commercial loan rates are "sticky," consistent with rationing, this stickiness varies with loan contract terms in ways that are not predicted by equilibrium credit rationing theory. In addition, the proportion of new loans issued under commitment does not increase significantly when credit markets are tight, despite the fact that borrowers without commitments can be rationed whereas commitment borrowers are contractually insulated from rationing. Overall, the data suggest that equilibrium rationing is not a significant macroeconomic phenomenon.

This paper examines the credit rationing debate using detailed contract information on over one million commercial bank loans from 1977 to 1988. While commercial loan rates are "sticky," consistent with rationing, this stickiness varies with loan contract terms in ways that are not predicted by equilibrium credit rationing theory. In addition, the proportion of new loans issued under commitment does not increase significantly when credit markets are tight, despite the fact that borrowers without commitments can be rationed whereas commitment borrowers are contractually insulated from rationing. Overall, the data suggest that equilibrium rationing is not a significant macroeconomic phenomenon.

We build a bridge between relationship lending and transactions lending—investigating relationship effects on contract terms for credit cards, a relatively pure transactions-lending technology. Using more than 1 million accounts, we find that during normal times, consumers with relationships obtain better terms but small businesses with relationships do not. Both groups obtain improved terms during COVID-19, consistent with intertemporal smoothing—relationship borrowers obtain more favorable terms during crises, paid for by worse terms in normal times. Among other findings, CARES Act impediments to reporting consumer delinquencies to credit bureaus, designed to protect customers, reduced informational value of credit scores, penalizing safer consumers.