WASHINGTON (Reuters) — Despite the dismal economic environment and the ongoing financial crisis, lending at the top 20 banks tapping U.S. Treasury coffers “largely held steady,” partly as a result of the government’s capital injection program, the Treasury Department said on Tuesday.
“Loan activity was resilient in the face of the worst economic crisis in decades,” Treasury said in a written statement.
Specifically, Treasury said that in the first quarter of the program, which began in October of last year, banks continued to make new loans and refinance existing ones to both consumers and businesses.
The department said loan originating activities were “weak” in October and November of last year but picked up through December as mortgage rates fell and a new facility to guarantee loans from the Federal Deposit Insurance Corporation was implemented.
Treasury intends to issue a report monthly on the lending activities of banks receiving money through the Capital Purchase Program that was initiated last October.
So far, some 400 banks in 47 states have taken government money. Tuesday’s Treasury report covered only the top 20 banks, including such well known lenders as Bank of America.
Reporting by Corbett B. Daly, Editing by Diane Craft