The consumer lending business at many of the nation's commercial banks is faltering. Although margins for many products remain strong, weak demand coupled with the competitive challenge of nonbanks, product substitutes, and securitized offerings are slowing the growth of bank loan footings. From 1991 through 1993, the compound annual growth rate of bank revolving consumer loans came to just under 4%, compared to a 10-year figure of 11.1% (Rates for 1994 will shortly become available and are not expected to change the basic trend.)

In 1984, banks held 59% of outstanding consumer revolving loans; by 1993, that share had fallen to 49%. The bank share of auto loans dropped from 48% to 44% over the same period. In mortgage originations, banks have been taking share away from thrifts over the course of the last decade, although thrifts have recently recouped a bit of this loss. Both intermediaries, however, have been losing to the mortgage companies. Thus, in 1993, banks accounted for 26% of originations versus a 41% share in 1987.

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