Inside these posts: Lending

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Report: Aggressive lending doomed Broadway Bank

Signage gets changed in the window at Broadway Bank at 5960 N. Broadway. The bank was seized by the FDIC on Friday, Apr. 21, 2010. (Phil Velasquez/Chicago Tribune)

A regulatory autopsy into the April failure of Chicago’s Broadway Bank, which was owned by the family of failed U.S. Senate candidate Alexi Giannoulias, faulted management for pursuing an aggressive growth strategy in commercial real estate.

A heavy emphasis on such lending was “exacerbated by the bank’s significant emphasis on out-of-territory lending and large borrower relationships,” according to a report released Tuesday by the Federal Deposit Insurance Corp.’s Office of Inspector General.

Although not a primary reason for its failure, the FDIC also cited Broadway’s investments in higher-risk collateralized debt obligations. Get the full story »

Report: Small business loans rise

Small U.S. businesses stepped up borrowing in September, data released by PayNet Inc on Monday showed, suggesting the recovery is gaining steam even before the Federal Reserve Bank embarks on an expected new round of monetary stimulus.

The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, rose 16 percent in September from a year earlier, PayNet said. The index rose 15 percent in August, and is now at the highest level in almost two years. Get the full story »

Nobel winner Mortensen chides ‘dysfunctional’ lenders

A U.S. labor economist awarded the Nobel Prize in economics on Monday said a “dysfunctional” lending environment has made it hard for small service businesses — the source of most jobs — to finance hiring.

Northwestern University professor Dale Mortensen, whose work focused on labor market inefficiencies that make it difficult for workers to match up to job openings, said employers have fewer jobs to offer and government can do only so much about it.

“To bring unemployment down we need to create service jobs,” Mortensen said, speaking to reporters from Aarhus University in Denmark, where he is a visiting faculty member. Get the full story »

$7 billion-asset Warrenville credit union seized

A $7 billion-asset Warrenville credit union that suffered massive losses in mortgage-backed securities was one of three critically undercapitalized institutions seized Friday by the U.S. government.

Members United Corporate Federal Credit Union was one of three “wholesale,” or “corporate,” credit unions put into conservatorship by the National Credit Union Administration. Get the full story »

Fed sees easing in lending standards

The Federal Reserve said Monday that bank lending standards eased somewhat over the last three months while demand for business and consumer loans was largely unchanged.

In its quarterly Senior Loan Officer Survey, taken in July, the Fed found that tight lending conditions, which some economists have linked to the weak economic recovery, were starting to ease. Get the full story »

GOP blocks $30 billion in aid to small business

U.S. Senate Republicans Thursday blocked a $30-billion plan to help community banks boost lending to small businesses, dealing a blow to President Barack Obama’s election-year battle to reduce unemployment.

Tempers ran high as Democratic leaders failed to muster the 60 votes needed to  pass the measure. Republicans were upset that Democrats shut them out from offering a number of amendments to the package, that also includes about $12 billion in tax breaks for small businesses.

Small business loan program runs out of cash

Government-backed loans to the nation’s small businesses dropped sharply last month after a key federal program ran out of money.

The reduction in lending comes as officials are scrambling to find a way to stimulate the small-business sector. On Monday, Federal Reserve Chairman Ben S. Bernanke said loosening credit to small businesses should be a priority for banks and policymakers.

Bernanke: Lending to small business vital

Boosting credit to struggling small businesses is vital to keep a tepid U.S. recovery on track but wary banks can’t be forced to lend from their bountiful reserves, Federal Reserve officials said Monday.

Fed Chairman Ben Bernanke underlined the need for companies — many working their way back to health from the deep recession — to be able to get loans when they need them to expand and to hire. Get the full story »

Bank lending stalled despite reform

From CNN | While Washington moves ahead on reforming the nation’s financial system, bank lending appears to be going nowhere fast.

Many banks have been reluctant to make new loans in recent months, in part, because of uncertainty about just how harshly lawmakers would crack down on the industry. But last week’s ironing out of a Wall Street reform bill may do little to revive the flow of credit. Get the full story »

GM looks to boost sales to ’subprime’ buyers

General Motors Co. is looking to boost auto sales by lining up banks and other financial institutions to make loans and lease deals for buyers with poor credit.

The talks lessen the likelihood of GM trying to buy the auto finance business from Ally Financial Inc., its main lender. They also make it less likely that GM would start its own auto financing unit. Get the full story »