Timothy Geithner tells the banks to start lending again

November 19, 2009  |   Posted in Credit Education, Credit Guy Blog, Industry News, blog   |   0 Comments   Tags: banks, business loan, lending, stimulus, treasurer department

Treasury Secretary Timothy F. Geithner, speaking at a small-business financing forum at the Treasury Department, called on banks to “get back to the business of lending.”

The Treasury Department released a report earlier this week showing that many of the banks that received government aid in the form of stimulus money earlier this year continue to tighten credit. Loan originations in September fell 6 percent at Bank of America and 14 percent at Wells Fargo compared with the August.

Geithner went on to state that when banks rein in their lending it is the small businesses that are hurt the most since they rely on banks for 90% of their lending, versus large corporations that only get 30% of their loans from banks. “Banks bear some responsibility for the extent of the damage caused by the crisis, you carry a substantial obligation to help our communities get back on their feet.” he told the banking representatives.