Bank Lending Keeps Dropping After getting Funds
In a news release Wednesday unveiling the February lending numbers, the Treasury touted “the relatively steady overall lending levels.” It then calculated the median change in lending at the 21 banks. By that measure, the Treasury said, lending dropped 2.2% in February compared with the prior month.
The Treasury hasn’t released its own tally of the October to February decline.
Banks defend their lending, saying they’re eager to issue new loans, refinance existing ones and modify those in danger of default. The lending data indicate that consumer loans, especially mortgage refinancings, are accounting for an increasing portion of bank lending. Commercial lending slumped by about 40% over that period, the data indicates.
To reach that figure, the Journal made several adjustments to Treasury’s data. The number of student loans fell, which is typical during February.
One of the banks showing the biggest lending decline was J.P. Morgan Chase & Co. In October, the New York bank made or refinanced $61.2 billion in loans. That figure declined 35% to $39.7 billion in February.
J.P. Morgan executives defend their lending levels. The Treasury’s conclusion that lending has dropped only modestly is partly the result of its focus on the median monthly change at the top banks, rather than the change in average or total lending.
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