by Dan Fitzpatrick
posted by Greg Lipinski
Consumer-lending activity has increased in numerous midsize cities in the U.S., a sign they are riding out the recession better than big cities and rural towns, an analysis of credit data shows.
As banks pull back on risk taking across the nation, consumer-loan balances in places like Huntsville, Ala., are rising. In Huntsville, a metropolitan area of 376,000 that is home to many government contractors, borrowing increased 13.2% per household in last year's fourth quarter, compared with the year-earlier period, according to data provided to The Wall Street Journal by Moody's Economy.com and Equifax Inc.
Huntsville's increase was the largest among 207 U.S. metropolitan areas tracked by the two data-gathering firms. Similar-size cities such as McAllen and Brownsville, Texas; Yakima, Wash; Provo, Utah, and Lafayette, La., also saw consumer-loan balances rise by more than 8% year-over-year.
During the economic crisis, the banking industry has been criticized for not lending enough, contributing to the slowdown in economic activity. The data show that in some places, banks feel comfortable enough about local economies to lend more to consumers. Across parts of California, Florida and Michigan, on the other hand, consumer-credit balances have been falling, the data indicate.
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