BOSTON, Nov. 2 (UPI) -- Billions of dollars of U.S. bailout funds have gone to pay down bank debt, rather than increase small business lending, a leading economic analyst said.
Economic analyst Brian Bethune at IHS Global Insight said banks with frozen assets clogging their books do not have the funds available for lending, The Boston Globe reported Monday.
"They're not really anxious to do that sort of business," Bethune said.
Bank of America, despite $45 billion in federal assistance, made 11 Small Business Administration 7(a) loans from September 2008 to September 2009 in Massachusetts, compared with 54 the previous year, the Globe said.
Citibank, whose parent company Citigroup Inc., accepted $50 billion in federal funds, made eight SBA 7(a) loans in the state in the same period, lending $2.4 million.
Central Bankcorp accepted $10 million in federal assistance, while OneUnited of Boston received $12 million. Not even a temporary suspension of a 2 percent borrowers fee could entice the banks to write SBA loans, the newspaper said.
"That's what has a lot of people on Main Street angry. It doesn't appear to them that bankers have suffered that much," said Cornelius Hurley, director of Boston University's Morin Center for Banking and Financial Law.