WASHINGTON - The government said Monday that lending to businesses from the top banks getting bailout funds fell in January despite the billions of dollars the banks received in government support.
The Treasury Department said in a monthly report that lending on regular business loans and on business loans backed by real estate both declined in January, compared to December. The findings were based on reports filed by the top 21 recipients of rescue money from the government's $700 billion financial bailout fund.
The report attributed the decline in loans banks made to businesses in January to weakening demand on the part of businesses, reflecting the dismal economy.
"Demand in commercial loans and commercial real estate continues to be limited by the economic downturn, as businesses remain cautious in taking on new debt obligations," Treasury said in the new report.
However, critics of the $700 billion financial rescue effort have complained that the government has not done enough to make sure that the money that banks are receiving is being used for its intended purpose -- to get banks to resume more normal lending to businesses and consumers.
Many lawmakers have said they are getting rising numbers of complaints from business constituents who say it is becoming harder to get new loans to keep their businesses operating and that banks are pulling their current lines of credit even though they are current on their loan repayments.
ASSOCIATED PRESS
