Banks Reduced Lending in January Even as They Promised More Loans
A new report from the Treasury Department — the last of its kind — shows that despite all the regulation-avoiding PR campaigns, new loans at the nine largest banks that still owe bailout funds to the government dropped by 35 percent in January.
The nine banks are: Citigroup Inc., Comerica Inc., Fifth Third Bancorp, Hartford Financial Services Group Inc., KeyCorp, Marshall & Ilsley Corp., PNC Financial Services Group Inc., Regions Financial Corp. and Suntrust Banks Inc.Increasing lending to consumers and small businesses was one of Congress’ stated goals when it passed the $700 billion financial bailout in October 2008.
That, however, has not been the result of the bailout. Despite the need, particularly among small businesses, for credit to keep businesses afloat or open new ones, opening the government coffers has yet to result in banks opening up their vaults to small business customers. In fact, six weeks after Obama called the 12 largest banks to the carpet about their small business practices, loan originations are down 35 percent. It’s like the banks don’t even care who is watching their behavior, as they already have what they want (the bailout) and didn’t have to do anything for it.
As part of its report, the Treasury Department announced it would no longer create a summary document to explain to people who don’t want to dig through spreadsheets what’s going on in the lending market. They called the reports “no longer meaningful.” What they may have meant was they don’t feel the need to make it easy for reporters to understand how little the banks are doing in terms of lending.