Lending from U.S. banks taking bailout money falls $42 billion

June 1, 2009 by · Leave a Comment
Filed under: Industry News 

As it should be, we are now in a new economic reality that no matter what stimulus or bailout is done, banks and other lending institutions are not going to lend at the same levels as before.  Before we had excessive real estate appreciation with ultra low interest rates.  In that environment, banks were mostly lending against the increased value of the property and were less looking at the borrowers ability to service the debt.

Now we are in an environment were the borrower matters and they are using the normal lending standards and that means less loans will be made which is a good thing.  The answer to our problem is not more debt but less.

News (Reuters):

The U.S. Treasury Department said on Monday average lending from about 500 banks that have received government capital injections fell $42 billion in March compared to February.

In the first monthly lending report from its Capital Purchase Program, the Treasury said average loans outstanding from CPP recipient banks fell to $5.237 billion in March from $5.279 billion in February.

The CPP accounts for about $200 billion of the U.S. government’s $700 billion Troubled Asset Relief Program.

Click Here to Continue Reading

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!