By Matt Egan – Re-Blogged From CNN Money
Stress in the oil industry is starting to contaminate other parts of the American economy.
For the first time since oil prices began crashing in mid-2014, banks polled by the Federal Reserve are warning of a “spillover” effect onto loans made to businesses and households in energy-dependent regions of the country.
Senior loan officers of nearly 100 banks acknowledged that credit quality has “deteriorated” on everything from auto loans and credit cards to commercial real estate mortgages. Translation: More people aren’t paying and delinquencies are rising.
It’s a sign of how the deep spending cuts, mass layoffs and even bankruptcy filings in the oil patch are inflicting real pain in certain energy-focused states like Texas and North Dakota.
Some large U.S. banks have individually warned of early signs of so-called contagion.