Big Banks Take Your Money & Run! Congresswoman Kaptur

October 26, 2009 C-SPAN Kaptur: The New York Times today reported "As Wall Street has returned to business as usual, industry power has become even m

October 26, 2009 C-SPAN

Kaptur: The New York Times today reported "As Wall Street has returned to business as usual, industry power has become even more concentrated among relatively few firms". A handful of mammoth banks have brought our nation, our credit system and our economy to its knees. Some call them too big to fail. One must ask why should a few big players have so much power. They can force tax payer bailouts for themselves, shut off credit and hold the reigns of our economy in their hands. A handful of firms are gobbling up our money, killing off smaller banks and institutions. Congress and this administration are just letting them do it.

My friends, such concentration of financial power is dangerous to our country. A few Wall Street firms are on the fast track to controlling all banking in this country. Rather than address this by breaking up these banks some in Washington say they just want to regulate them better. If you believe that, you haven't paid any attention over this last year. The biggest banks are getting bigger.

Fortune Magazine: Big banks take your money and run

A river of cash has flowed into the biggest banks over the past year. But for borrowers, it has been more of a meandering stream.

Deposits at the top five bank holding companies soared 29% in the year ended June 30, according to the Federal Deposit Insurance Corp.

Yet only one of those banks -- PNC (PNC, Fortune 500) of Pittsburgh -- boosted its lending by the same magnitude, according to midyear data from regulatory filings.

At Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500), loan growth trailed deposit growth by a wide margin.

And Citigroup (C, Fortune 500), the bank that has received the most federal aid since the market meltdown of September 2008, reported a decrease in lending despite an increasing pool of deposits.

All told, the five biggest deposit-taking banks added $852 billion in core deposits over the past year -- essentially checking and savings accounts of less than $100,000.

Over the same period, their loan portfolios rose by just $564 billion.

This is noteworthy because these five banks received more than $100 billion in direct taxpayer assistance via the Troubled Asset Relief Program (TARP) -- a program that was set up to replenish the depleted capital levels of banks and allow them to boost lending to consumers and small businesses.

Some fear the lending gap could hamper chances of an economic recovery.

About CSPANJunkie

Comments

We welcome relevant, respectful comments. Please refer to our Terms of Service for information on our posting policy.