The Treasury Department says that new lending plummeted in January at Hartford Financial Services Group Inc. and eight other largest lenders that have yet to repay their taxpayer bailouts, the Associated Press reports.
Treasury’s monthly survey of bank lending shows overall new loan origination dropped 35 percent from December’s level. Treasury says the drop “may be partially explained by large increases” in late 2009.
The survey also shows that average loan balances at the nine banks were 2 percent higher than in December — bringing them to their highest level since September.
The nine banks listed by the Treasury are: The Hartford, Citigroup Inc., Comerica Inc., Fifth Third Bancorp, KeyCorp, Marshall & Ilsley Corp., PNC Financial Services Group Inc., Regions Financial Corp. and Suntrust Banks Inc.
In late 2008, The Hartford, one of the nation’s biggest property-casualty and life insurers, acquired a small Florida savings and loan to qualify for the bailout.
Increasing lending to consumers and small businesses was one of Congress’ stated goals when it passed the $700 billion financial bailout in October 2008.
Treasury said this is the last time it will publish a summary analysis of the bank survey because “aggregate month to month changes are no longer meaningful.”
The nine banks surveyed in January held 17 percent of industry assets at the end of 2009. When the survey was first conducted in November 2008, it included the 22 largest banks holding bailout money. Those banks held 61 percent of industry assets.
