According to an article in the Star-Telegram, 20 of the largest banks receiving government bail out funds slightly reduced their lending to consumers and businesses in the last three months of 2008.
The article said:The Treasury Department said the banks reduced their mortgage and business loans by a median of 1 percent each, while credit-card lending rose by a median of 2 percent. The median is the point halfway between the banks that lent the most and those that lent the least.
This report provides further proof that banks are not doing nearly enough to stop the credit crisis. Banks were given bail out money to help them increase lending and they didn't increase lending, they reduced it. There are Americans facing foreclosure who might benefit from a mortgage refinance. There are other homeowners who are upside down on their mortgage or facing an APR reset that could send them to foreclosure, they also could benefit from a loan/refinance to set their finances straight. The tight credit market is affecting consumers in the worst way because it doesn't allow credit access to the consumers who need it the most. But the fact that these banks who received a taxpayer funded bail out have not increased lending is just further proof that they most likely don't have the consumer's best interests in mind.