Lending is Up, No Thanks to the Bailout

Lending is up, but it's not an effect of the bailout. Smaller financial institutions are driving the lending market singlehandedly. 

In fact, lending has grown more slowly among financial institutions who received a bailout than those who were uneligible. Some of the largest banks (Bank of America, JP Morgan Chase and Citigroup) have even reported declines in loans given on their latest financial statements. 

Smaller banks and credit unions have boosted lending in part by diverting business away from larger financial institutions which offer fewer lending options and higher rates. 

People are looking toward credit unions and small, local banks when they are unable to finance what they need at a larger institution. 

Smaller, local banks and credit unions are able to understand local markets and react to the financial crises occuring in places like Florida and Nevada. Larger banks tend to treat all communities the same and do not offer reasonable lending options in states experiencing financial troubles.