1 

TREASURY DEPARTMENT MONTHLY LENDING AND INTERMEDIATION 

SNAPSHOT 

Summary Analysis for July 2009 

Summary Analysis 

Economic Environment

Treasury’s eighth survey of banks’ activities was conducted as the economy showed more signs 

that the pace of contraction was easing. Early in the third quarter, monthly payroll job losses 

slowed to about half of the pace during the first six months of the year. The unemployment 

eased in July, but remained well above 9 percent, more than four percentage points above what 

economists believe to be full employment. Housing starts and home sales moved higher in July, 

which suggests some improvement in the sector, but overall, the levels of both sales and starts 

remained near all-time lows. Consumer spending also moved higher in July, but was still below 

the level reached before the financial crisis intensified last fall. Financial market strains eased 

further, with short-term credit spreads narrowing, the VIX falling well below levels seen in the 

first half of the year, and securitization continuing to improve. Despite modest improvements, 

the economy remains very weak and forecasters see the unemployment rate rising to 10 percent 

through the end of the year. 

July Survey Results

The overall outstanding loan balance (of all respondents) fell 1 percent from June to July at the 

top 22 participants in the Capital Purchase Program (CPP), due mainly to decreased demand 

from borrowers, payment of outstanding debt, and charge-offs by banks. Total origination of 

new loans at the 22 surveyed institutions decreased 10 percent from June to July. In July, the 22 

surveyed institutions originated approximately $282 billion in new loans. Total originations of 

loans by all respondents rose in 1 category (other consumer lending products), fell in 6 loan 

categories (mortgages, home equity lines of credit (HELOCs) commercial and industrial (C&I) 

new commitments, and commercial real estate (CRE) renewals and new commitments), and were 

flat in 1 category (C&I renewals). 

Growth in mortgages was mixed in July. New home purchases maintained the growth seen in 

June, but that growth was offset by a decline in refinancing originations. Respondents reported 

that both the number of fundings and the number of mortgage refinancing applications declined 

in July as interest rates rose (which provided less incentive for homeowners to refinance). 

HELOCs saw a decrease in total originations, and institutions indicated that demand is below 

2008 levels. Declining home values contributed to lower home equity demand. Households are 

facing growing pressures from a weakening labor market and further declines in their wealth. 

Outstanding credit card balances held by the surveyed institutions fell 1 percent in July, 

indicating that consumers are spending conservatively and paying down existing debt. Other 

consumer lending was the only consumer category in which originations increased in July. 
2 

Banks again reported that demand in both the commercial real estate (CRE) market and the C&I 

market is well below normal levels. None of the respondents predicted change in demand in the 

near term. 

• The total average outstanding balance of all loans decreased 1 percent from June to July. 

The median change in total average outstanding balances was a decrease of 2 percent. Of 

the 22 respondents, 2 reported increases in total outstanding balances from June to July 

(the largest increase was 4 percent) while 20 respondents experienced decreases in total 

outstanding balances (the largest decrease was 15 percent). Total originations of all loans 

decreased by 10 percent from June to July. Across all institutions, the median change in 

total originations was a decrease of 8 percent. Of the 22 respondents, 19 experienced 

decreases in total originations from June to July and 3 experienced increases in total 

originations.

• In general, mortgage originations fell from June to July, while the total outstanding 

mortgage balance fell 2 percent. Total mortgage originations by all respondents decreased 

by 14 percent, as decreases in refinancing originations offset increases in new home 

purchases. The median change in total mortgage originations was a decrease of 17 

percent. New home purchases were fairly strong in July, as originations increased 8 

percent over June originations. Declining home prices contributed to growth in new 

home purchases. There was a decline in demand for refinancing mortgages as rates rose 

during July, thereby decreasing the incentive to refinance. Refinancing mortgage 

originations fell 18 percent from June to July. 

• The total outstanding balance of HELOCs fell by 1 percent from June to July, as a 

number of respondents reported that they experienced run-offs in HELOCs during July. 

Total HELOC originations decreased by 9 percent in July. The median change in 

originations was a decrease of 9 percent from June to July. Of the 16 entities active in the 

HELOC market, 3 experienced increases in originations and 13 experienced declines in 

originations. Most respondents noted that demand was below 2008 levels. 

• The total credit card outstanding balance of all respondents fell 1 percent in July, 

indicating that consumers are spending conservatively and paying down existing debt. 

Job losses, generally low levels of consumer spending and higher savings rates 

contributed to the decline in credit card balances. Of the 14 respondents active in the 

credit card business, 6 experienced increases in outstanding balances, 5 experienced 

decreases in outstanding balances, and 3 experienced no change in outstanding balances. 

Similarly, origination activity was split; 5 of the respondents making originations 

experienced increases, 7 of the respondents making originations experienced decreases, 

and 2 of the respondents making originations experienced no change. Total credit card 

originations by all respondents decreased by 4 percent in July. The median change in 

credit card originations was a decrease of 5 percent. 

• The total outstanding balance of other consumer lending products was flat in July. Of the 

19 institutions active in other consumer lending, 11 institutions experienced decreases in 

outstanding balances, while 8 institutions experienced increases in outstanding balances. 
3 

Total other consumer loan originations increased by 18 percent from June to July, due to 

1 institution’s purchase of a large pool of auto loans. The median percentage change in 

other consumer loan originations was a decrease of 3 percent. The changes in 

originations at the institution level were split; 7 of the 18 respondents active in other 

consumer lending experienced increases in originations while 11 experienced decreases 

in originations. 

• The total outstanding balance of C&I loans fell 2 percent; the median change in average 

outstanding C&I balances was a decrease of 3 percent. Economic uncertainty has caused 

businesses to downsize, cut costs, reduce inventories, and delay capital expenditures. 

Lower overall merger and acquisition activity further contributed to the decreased 

demand for C&I credit. Nearly all respondents indicated that, throughout the recession, 

demand in C&I lending has remained well below pre-recession levels. Companies 

continued to focus on preserving liquidity, strengthening their balance sheets, building 

cash reserves and paying down existing debt rather than taking on new debt. 

Total renewals of existing C&I accounts were flat in July, and the median change in 

renewals was a decrease of 8 percent. Total new C&I commitments decreased 19 percent 

in July, with 4 banks reporting increases in new commitments and 16 banks reporting 

decreases. The median change in new commitments was a decrease of 21 percent. 

• In commercial real estate (CRE), new loan demand remains low due to the lack of new 

construction activity. Real estate developers are reluctant to begin new projects or 

purchase existing projects under current poor economic conditions, which include a rising 

supply of office space, as firms downsize and vacancies rise. Finally, nearly all 

respondents indicated that they are actively reducing their exposure to CRE loans, as 

banks expect CRE loan delinquencies to persist. The outstanding balance of CRE loans 

of all respondents decreased by 1 percent, and the median change in outstanding balances 

was a decrease of 2 percent. 

Total renewals of existing CRE accounts decreased 5 percent from June to July. The 

median change in CRE renewals from June to July was a decrease of 24 percent. Total 

new CRE commitments decreased 14 percent from June to July, and the median change 

in new commitments was a decrease of 16 percent. Of the 16 institutions that made new 

CRE commitments, 7 experienced increases in new commitments and 9 experienced 

decreases in new commitments. 

• In July, total small business outstanding balances decreased by 1 percent, and the median 

change in small business outstanding balances was a decrease of 1 percent. Total small 

business originations decreased by 14 percent. The median change in small business 

originations was a decrease of 15 percent. As most small business originations are 

included in either C&I or CRE originations (renewals plus new commitments), this trend 

is in line with overall declining trends in C&I and CRE originations in July. 

• Equity underwriting was down in July compared to June, but respondents indicated that 

in general, the market exhibited overall stability in July. Positive earnings results from 

some companies and a general rally contributed to stability. 
4 

• The chart on page 6 (“Growth in Loan Originations, July 2009 vs. June 2009”) illustrates 

the range of changes in lending activity among the 22 institutions. The bar on the far 

right, for example, indicates that the median change of loan originations of all types was 

a decrease of 8 percent in from June to July; originations of all types fell by 28 percent 

for the institution at the 25th percentile, and originations of all types fell by 2 percent for 

the institution at the 75th percentile. There was considerable variability in lending 

activity by category across banks (less so in HELOCs and small business loans).
5 

Name First Mortgage HELO C (Lines and Increases)

US Card 

(Managed): 

Initial Line 

Amount

O ther 

Consumer 

Lending

C & I: 

Renewal of 

Existing 

Accounts

C & I: New 

Commitments

CRE: Renewal 

of Existing 

Accounts

CRE: New 

Commitments

Small 

Business

American Express N/A N/A $1,620 N/A N/A N/A N/A N/A 

Bank of America $36,505 $934 $1,582 $2,767 $18,727 $9,868 $2,324 $612 $1,

Bank of New York Mellon $58 $5 N/A $0 $32 $1 $44 $81 

BB&T $3,334 $76 $245 $391 $794 $1,334 $1,359 $301 $

Capital O ne $169 $29 $449 $491 $157 $348 $48 $238 

CIT N/A N/A N/A $0 $2,378 $993 $0 $0 

Citigroup $5,344 $124 $6,547 $1,036 $815 $677 $1,179 $120 $

Comerica $48 $15 $14 $48 $3,304 $285 $492 $16 $

Fifth Third $2,113 $148 $102 $361 $1,924 $1,014 $383 $130 $

Goldman Sachs $40 $0 $0 $72 $264 $728 $100 $0 

Hartford $0 $0 N/A $0 $2 $0 $1 $0 

JPMorgan Chase $14,764 $169 $3,232 $2,757 $15,201 $9,204 $372 $496 $

KeyCorp $206 $99 $0 $21 $1,440 $658 $641 $49 

Marshall & Ilsley $226 $71 $7 $74 $261 $102 $48 $107 

Morgan Stanley $23 $0 N/A $532 $312 $2,251 $0 $0 $

Northern Trust $103 $72 N/A $116 $913 $240 $13 $83 

PNC $1,550 $466 $248 $253 $4,804 $2,355 $668 $173 $

Regions $704 $109 N/A $104 $2,087 $954 $1,658 $411 $State Street N/A N/A N/A N/A $838 $140 $2 $0 

SunTrust $5,162 $142 $10 $376 $2,075 $1,160 $226 $226 U.S. Bancorp $6,703 $491 $648 $817 $4,995 $2,213 $1,424 $574 $

Wells Fargo $40,369 $607 $1,341 $2,193 $12,397 $6,637 $2,518 $956 $2,

Total (All Institutions) $117,419 $3,557 $16,044 $12,409 $73,720 $41,161 $13,499 $4,573 $8,Change in Total (All Institutions) 3 -14% -9% -4% 18% 0% -19% -5% -14% -1

First MortgagesHELO CUS Card (Managed)C & ICRESmall Business

N/A 1 These loans are already accounted for in either consumer lending, commercial lending, or a combination of both.2 Total Originations does not include the "Small Business Originations" column.3 Percentage changes are calculated versus June 2009 figures.

Loan Originations, July 2009

($ Millions)

Loan Category Key

NO TE: Reliance on internal reporting means that aggregation by loan category varies for each reporting bank. Because of the differences in loan category definitions, comparisons of origination levels across firms may be imperfect. 

US credit cards (managed)Loans secured by first liens on residential real estateHome equity lines of creditCommercial and industrial Commercial real estateDenotes recipient is not active in this category Loans to small businesses
First Mortgage HELOC (Lines and Increases)

US Card

(Managed):

Initial Line

Amount

Other

Consumer

Lending

C & I: Renewal

of Existing

Accounts

C & I: New

Commitments

CRE: Renewal

of Existing

Accounts

CRE: New

Commitments

Small 

Orig

75th Percentile ‐4% ‐3% 6% 8% 9% ‐3% 0% 26% 25th Percentile ‐36% ‐12% ‐18% ‐10% ‐25% ‐34% ‐48% ‐37% ‐

Median ‐17% ‐9% ‐5% ‐3% ‐8% ‐21% ‐24% ‐16% ‐

Total (Across All Institutions) ‐14% ‐9% ‐4% 18% 0% ‐19% ‐5% ‐14% ‐

‐60%‐50%‐40%‐30%‐20%‐10%

0%

10%20%30%

Change in Loan Originations

July 2009 vs. June 2009

6