Citibank reported holding $175.6 billion in consumer credit in its 2016 Q2 earnings.
Citibank reported holding $175.6 billion in consumer credit in its 2016 Q2 earnings. - 

U.S. banks are lending to consumers at the fastest rate since 2007 and the increasing debt is causing concern given the slowing economy, the Financial Times (subscription required) reported this week.

Lenders issued $18 billion in debt debt for card loans and other types of revolving credit within a three-month period. The second quarter results for several banks show an overall increase of credit card loans, ranging from 10 percent for Wells Fargo to 26 percent for the smaller Atlanta-based SunTrust.

All together, these banks —Wells Fargo, Citigroup, US Bank and SunTrust — hold about $216 billion in consumer debt, according to their Q2 earnings.


Coupled with growing uncertainty from this year’s election and more consumers missing payments, experts think this increased lending could spell trouble for lenders down the road.

Synchrony Financial, biggest issuer of retail store credit cards said last month that more and more consumers are missing payments.

Joel Bines of consultancy AlixPartners told Marketplace last month that banks are starting to do what they did before the recession — make more money by lending to people who probably shouldn’t be borrowing.

“The model of loosened credit standards to chase yield and lend deeper to a segment of consumers. It just doesn’t end well," Bines said. "I mean, it never ends well.”

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.