The U.S. Treasury said on Monday that loan balances at the top 22 banks that received government capital injections under the Troubled Asset Relief program fell again in June, but loan origination rose.
The Treasury said in a monthly TARP lending survey that average loan balances at the banks declined by $45.7 billion, or 1.1 percent, to $4.295 trillion. It was the fifth consecutive monthly decline in balances.
Households are facing growing pressures from a weakening labor market and the recent declines in their wealth, the department said.
In this context, consumers focused on paying down debt and reducing spending, driving the decreases in outstanding balances held by major banks, Treasury said.
The Treasury said that loan origination at the 22 banks rose $35.1 billion in the month to $312 billion.
The increase in originations was driven largely by increases in new home purchases and seasonal renewals in commercial and industrial and commercial real estate lending, the department said.