By Corbett B. Daly
WASHINGTON (Reuters) -- Despite the dismal economic environment and the ongoing financial crisis, lending at the top 20 banks tapping U.S. Treasury coffers fell slightly but "largely held steady," partly as a result of the government's capital injection program, the Treasury Department said on Tuesday.
"Loan activity was resilient in the face of the worst economic crisis in decades," Treasury said in its first monthly status report on the Capital Purchase Program introduced by then Treasury Secretary Henry Paulson.
"Lending levels largely held steady and would have likely been lower absent capital provided to banks through CPP," Treasury said.
Loan originating activities were "weak" in October and November of last year but picked up during December as mortgage rates fell and a new facility to guarantee loans from the Federal Deposit Insurance Corporation was implemented.
The median change in mortgage and corporate loan balances each fell 1 percent in October through December. Credit card balances rose 2 percent, reflecting greater reliance on existing credit lines by consumers, the department said.
So far, some 400 banks in 47 states have taken federal funds as the government seeks to stabilize the fragile financial system, which is in the midst of the worst crisis since the Great Depression.
Treasury Secretary Timothy Geithner last week rattled financial markets as he unveiled his new bank rescue plan without providing details to investors who were looking for more clarity on how the new Obama administration would relieve banks of money losing assets.
Tuesday's Treasury report covered only the top 20 banks and activity through the end of the year. For more details on the capital purchase program, which includes information Bank of America
(Reporting by Corbett B. Daly, Editing by Diane Craft)