Since the credit crisis hit in 2007, the US lending market has been in recession, or as the technocrats put it, “deleveraging.” 

Mark your calendars, folks, because apparently deleveraging is officially over.

Today, Standard & Poor’s published a report all but declaring the lending recession over.

The long downward trend in credit card debt may soon bottom as the household debt service and financial obligation ratios are near their historical averages. Also, declining consumer default and charge-off rates and increased willingness to lend at large banks signal that revolving debt deleveraging is slowing down.

S&P cites current lending trends.

“…[S]ince July 2010, we have seen U.S. consumers increase their nonrevolving consumer debt. This suggests that deleveraging is over for nonrevolving debt,” said S&P research analyst, Erkan Erturk.

There is great import in this. We’ve seen that the Great Recession has tended to unwind in spurts. As asset values or pricing comes in past certain thresholds, such as when the TED spread dropped below 100 for good in April 2009, investors tend to get emboldened and another barrier to recovery is removed. Perhaps the end of deleveraging falls into that category? Will that mean lenders will simply re-inflate consumers’ balance sheets? I certainly hope not. But a process of unwinding revolving credit has certainly taken place in the US, and that’s an important fact to consider when underwriting new loans.