Comments on: Reader Question: Why Aren’t Banks Lending?

By: Forget Stress Tests: Consider Local Banking : Yielding Wealth - Personal Finance Tips - Money Management Advice

Wed, 29 Apr 2009 17:36:28 +0000

[...] are, these indications will be more likely to help you determine how safe your money is. If your bank is still lending, it is probably in reasonably good health. And, in fact, many local banks and credit unions are [...]

By: Jim

Jim — Thu, 26 Mar 2009 20:17:56 +0000

Where to begin…… I don’t agree with very much in this article other than the implication that the AIG situation is a disgrace that politicians in both parties have abetted.

Personally, I’ve had no shortage of banks trying to loan me money, even though I have no desire for it. The banks internal figures also show a significant amount of lending (Wells Fargo $51B in Jan, BAC $115B in the 4th quarter) so the statements by politicians, etc., to the contrary are just plain wrong and misleading (imagine that). Loan securitization is where the marketplace has gone on strike because it doesn’t trust the quality of what’s packaged in the securities. Hence, the Geithner plan to clear questionable assets off of bank books, and help hedge funds and other financial intermediaries make a large profit while the taxpayers shoulder all the risk.

I won’t debate the merits of that plan here, but I’m not sure more credit is the answer to our economic woes. The consumer clearly needs less debt, especially credit card debt. For our long-term good, we need to change from being a society of consumers to a society of savers and producers. Demographics are helping propel this trend.

The banks are seeing a dramatic increase in deposits. The yield curve is normal and very favorable for bank profits. The Fed is artificially driving down interest rates to drive up demand for housing and place a floor under prices. These are all trends that bode well for the future. And the Congressional shenanigans surrounding AIG have motivated a lot of bankers to double up on efforts to repay the TARP as soon as the Treasury will let them.

Doom and gloomers see the glass as 9/10 empty, but it is starting to refill. Why should it be a surprise to anyone that banks have gotten religion and are only lending to the most credit-worthy? Isn’t that what they should have doing in the first place? Who wants to live in country built on trickle-up poverty anyway?

By: LoanShak » You CAN Get a Loan — Even With This Credit Crunch

LoanShak » You CAN Get a Loan — Even With This Credit Crunch — Wed, 25 Mar 2009 17:07:12 +0000

[...] are some tips for getting a loan during the credit crunch: 1. Go local for your loans: Many of the big banks just aren’t lending, despite bailout funds aimed at loosening the credit market. Instead of looking to the [...]

By: Miranda Marquit

Miranda Marquit — Wed, 25 Mar 2009 01:10:25 +0000

You make a good point — for some banks on the local level. Local and regional banks are indeed lending at a higher rate than the so-called elite. Unfortunately, though, focus is on the big banks because that is who is getting all the taxpayer dollars. You like to see organizations who are getting all this money turn around and do what they’re supposed to do…

By: Good News Economist

Good News Economist — Tue, 24 Mar 2009 22:34:22 +0000

Actually the majority of banks are doing just fine and indeed are lending.
There really is no credit crunch at *most* banks…
http://mast-economy.blogspot.com/2008/12/no-credit-crunch-for-most-banks.html

The problem with toxic assets is mostly concentrated in the top 19 “elite” banks. Those are where the problems lie…
http://mast-economy.blogspot.com/2009/02/bernake-gets-it-just-right.html