Bank Lending Hits $1 Trillion—But CEO Sees Roadblock Ahead
Banks recently hit the $1 trillion mark for lending this year—the same amount they lent in the entire previous year. Although reaching this mark so soon is a good sign for the housing sector, the creditworthiness of many Americans has suffered since the housing downturn, a banking executive said.
Russell Goldsmith, chairman and CEO of City National Bank , told CNBC that one roadblock for lending stems from the state of economy, which has affected the creditworthiness of borrowers.
"You've also got this circus going on in Washington so a lot of [borrowers] are just going to sit on the sidelines and wait to see what happens," Goldsmith said. "Is financial armageddon ahead? That's what people hear in the headlines so they're going to pause."
At City National Bank, commercial loans were up 6 percent in the second quarter compared to the previous quarters, and total loans have risen 2 percent, Goldsmith said.
He added that while he thinks the definition of "creditworthy" for banks has not changed, the creditworthiness of many Americans has changed.
"I think that gets lost in the noise of 'Why aren't banks lending more?'" Goldsmith said. "Part of it's demand. Part of it's creditworthiness."
The Biggest Lenders:
Bank of America is the largest U.S. lender by assets; JPMorgan is a close second.
American Express , Citigroup and Capital One are among America's largest credit-card lenders.
CNBC Data Pages:
Disclosure information was not available for Russell Goldsmithor his company.