Bank lending plummets in 2009

Lending by the banking industry fell by $587 billion, or 7.5 percent, in 2009, the largest annual decline since the 1940s, the Federal Deposit Insurance Corp. reported Tuesday.

FDIC Chairman Sheila Bair said that some small banks have dialed back on lending because of financial weakness, a problem the Obama administration aims to address with a proposal to pump $30 billion in new federal aid into community banks. But Bair said that the vast majority of the decline was the result of lending cutbacks by the largest banks.

Full story: Bank lending plummets in 2009