FORTUNE -- Finally, nearly two years after they were bailed about by Congress, big banks are beginning to ease lending standards for individuals and small businesses. But it's not exactly having the reception many believed it would. Just when credit becomes more available, there's little evidence of a surge in demand for it.

Since the financial crisis, banks have been blamed for slowing the pace of economic recovering because of their reluctance to lend. Unlike larger companies that can borrow from bond markets, small businesses and consumers mostly depend on loans from banks. Federal officials have said tight credit has kept households from spending more and small businesses from hiring more.

Now the U.S. Federal Reserve says banks are modestly expanding credit. But the...