McBride said banks have not cut lending in response to the Fed’s rate hikes. There is now a surplus of deposits in the industry, and banks are instead choosing to be “thrifty” in paying customers who have their money deposited there, he said.
“The problem is they don’t want to bring in additional deposits,” McBride said. Banks were “trying to lend out what they had,” he said.
But if delinquencies and defaults increase, banks will be less willing to take on riskier debt, he said.
McBride’s calculations do not reflect competition with direct lending provided by credit unions.
Data from Experian shows that credit union market share has surged over the past year. The segment captured 28% of all new and used vehicle loans and leases in the third quarter.
Banks are raising interest rates “as fast” as the Federal Reserve, McBride said. But credit unions have not followed to the same degree, he said.
“We’re still seeing some deals in the credit union space,” McBride said, adding that such arrangements were “much harder to find in the banking space.” I said there is a tendency.
This article was optimized by the SEO Team at Clickworks SEO