While big cities and rural areas have taken a beating as the financial crisis unfolds, many mid-size cities have seen consumer lending increase, indicating an economic resilience that other areas lack, the Wall Street Journal reports. In cities with populations around 400,000—like Huntsville, Ala.; McAllen, Texas; and Provo, Utah—banks are lending as usual, pushing consumer loan balances up 10% or more from last year.
The increased lending could reflect reckless borrowing, but credit experts say that's unlikely. “Anyone that is getting a new loan, the bank deems a pretty low risk,” one Equifax executive said. More disciplined economic development strategies, diverse employment, and lower costs of doing business are likely behind the lending patterns. Many mid-size cities didn’t experience a housing bubble, and local banks hold fewer non-performing loans.