Credit Availability Guidance

Pursuant to a congressional request, GAO reviewed regulatory policy initiatives that address the continued decline in credit availability. GAO found that: (1) regulators have issued financial guidance to clarify existing policies relating to financial institutions' assets and capital requirements; (2) uniform regulatory guidance ensures that bank examiners consistently evaluate the safety and soundness of the banking industry; (3) two major interagency policy initiatives developed by the Office of Thrift Supervision encouraged increased disclosure of financial institutions' loan portfolios, facilitated extensions of credit to worthy borrowers, and ensured sound assessments of the value of real estate used as collateral; (4) although most regulators were satisfied with the initiatives, few financial institutions have implemented Treasury's recommendations; and (5) the clarification of examination procedures should help leaders meet the credit needs of sound borrowers.