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Interesting article written by the President of the Canadian Bankers Association where she is trying to dispel some myths about the Canadian banking system and deflect some of the recent criticism her members are receiving lately. Myth 1: Banks are not lendingShe says bank lending to business increased by 13.4%  in the 12 month period November to November.  My immediate suspicion is that some of this increase may have happened in the the first four to six months of this time period.  What is more relevant ion my opinion to dispel this myth is what are the numbers in the past 6 months?“All the evidence shows that bank lending continues to increase and banks are stepping in to provide credit to consumers and businesses that have seen their access to other sources of funding reduced.”Pretty vague if you ask me?  Myth 2: Banks are making it more difficult for credit worthy customers to get loans“Banks have not changed the criteria that they use to decide whether or not to provide loans. If you are a credit-worthy individual or business, Canada’s banks are open for business.”That is such a load of crap I can’t believe it.  I suppose it serves her well to have people believe this but is clearly not true.  Ask the small businessman who can’t get a renewal on his line of credit he has had for 10 years?  Ask the self employed plumber who has been in business for 15 years and has excellent credit who can’t get a mortgage approved for 5 or even 10% down?I can tell you from being in the wholesale mortgage industry for over 15 years that the current lending environment has receded at least 5 years or maybe more in innovation and access to credit.  I get that many people think some of this was necessary because mortgage credit was becoming too easy…Ok, but then don’t try and tell us that underwriting criteria has not changed because it CLEARLY has!Myth #3: Banks should match Bank of Canada Interest rate cutsShe of course outlines what many of us now know that the Bank of Canada rate is only one source for banks to lend money and that other sources for money has increased the cost of funds so they can not necessarily match the Bank of Canada rates.  No problem Mr. Carney is smarter then them.  His last rate drop of .75% (predicted by me on this blog) was really only that severe because he knew the banks would not match him.  He really only needed or wanted them to go down by .50%, which they did.  Mission accomplished.  he knew that if he went down by .50% they would have only came down .25%.Based on this theory I suspect that he will drop rates again by .75% at the end of January.I hate when people who so clearly have a hidden agenda are able to write in the papers and be so one sided in their editorial.  Some things she says are likely true but have some perspective and show all sides to the argument…that is how you gain credibility 

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