A big reason for the slow recovery has been that the nation's battered banks haven't been able or willing to lend. There are signs that's changing and that bank lending is helping to support stronger growth.
Paul Kasriel, chief economist at Northern Trust, a Chicago-based bank, say his reading of Federal Reserve data has convinced him that banks have finally taken the baton from the Fed and are now making credit more available.
"We've seen a sharp increase in business loans on the books of banks," he says.
The Occupy Wall Street movement has directed much of its anger at giant banks, which are no strangers to customer complaints. Some of those who have been burned by high fees in recent years are now satisfying their banking needs with a giant retailer instead, as Wal-Mart surges into the financial sector with a pre-paid, reloadable debit card called the MoneyCard.
The Village of Hempstead, N.Y., sounds like a posh resort in the Hamptons. But if you ride the train an hour east from Penn Station, what you'll find is a working-class town of about 54,000 people, more than 80 percent of them African-American and Hispanic.
Nearly a third of local residents are underwater on their mortgages, six times the state average. Mayor Wayne Hall says he heard story after story from local residents who tried to get banks to refinance their loans, but couldn't. Finally, Hall got fed up.
Democratic Senator Mark Udall introduced an amendment today that he says could create as many as 100,000 jobs. The goal is to increase how much credit unions can lend in Colorado—and nationwide.
Right now credit unions can only lend about 12 percent of their total assets. But Senator Udall thinks that number should be just above 27 percent. That’s because small businesses have struggled in recent years to gain access to capital despite a $30 billion dollar infusion of cash from the federal government to banks to help increase loans.