This morning at a Congressional Oversight Panel Hearing, “The Impact of Economic Recovery Efforts on Corporate and Commercial Real Estate Lending” in New York, Congresswoman Carolyn Maloney said that anecdotal evidence shows “access to commercial credit is absolutely frozen.” Comments like this drive me up the wall. Not only is the statement extremely general, but it is also absolutely not true. The only commercial credit market that is frozen right now is the commercial mortgage-backed securities (CMBS) market, which represents about 25% of the entire commercial real estate debt market, according to research analyst Richard Parkus at Deutsche Bank:

Banks and thrifts account for 50 percent and insurance companies comprise the remaining 25 percent of the lending, Parkus said.

So are the banks lending? Surprise, they are:

Bank lending for commercial projects in the first half of 2009 is on track to hit about $25 billion, according to Matt Anderson at research firm Foresight Analytics in Oakland, Calif.

By way of comparison, commercial loan origination was at pace of $33 billion a quarter at the peak of the market.

Yes, at $25 billion for the first half of 2009, bank lending for commercial real estate is low compared to the peak year. But we are not at the peak of the market, are we? And, according to the New York Fed, demand for commercial real estate loans is at a all-time low:

The same cannot be said for loan demand. The SLOOS reports that the net fraction of loan officers reporting weaker demand in April 2009 was 60% for C&I and 66% for CRE loans, a historical low for CRE demand. Weak demand bears emphasis, as it indicates that the observed slowdown in overall credit is partly due to firms’ reluctance to borrow, and not entirely to banks reluctance to lend.

One of those days, maybe people will realize that the CMBS market doesn’t represent the entire commercial real estate debt market. I’m not counting on that though. You can review all the COP hearing testimonies here.