Updated with information on the $1 billion lawsuit brought by the Department of Justice against Bank of America. NEW YORK ( TheStreet) -- Investors better get set for an especially lousy fourth quarter for bank stocks. FBR analyst Paul Miller says that "the loan pipelines are strong," as commercial borrowers are arranging "credit lines but they are not borrowing the money," as they wait to see what happens in the November elections, and with the "fiscal cliff." The fiscal cliff refers to the year-end expiration of the income tax cuts -- including the 15% maximum tax rate on qualified dividends -- signed into law by President George W. Bush and extended by President Obama in 2010, as part of the compromise with Congress to raise federal debt ceiling limit. The 2010 compromise also requires large federal budget cuts beginning in 2013, unless Congress acts. "The Democrats and Republicans cannot get together until very late in the quarter on the fiscal cliff," Miller says, adding that "we think lending in general will dry up in the fourth quarter. Most companies have said that it started drying up in mid-September." So investors are anticipating a slow-down of commercial and industrial (C&I) lending, which has been a very important growth story for large regional banks over the past year. "It's going to get dark, dreary, cold and damp, as the Republicans and Democrats have it out," leading into the elections, Miller says. "We believe that at some point there will be a compromise" on the fiscal cliff, Miller says, but "the deeper we go into this year and if it crosses January 1, the worse it will be for the perception of the world, and for bank stocks." "Once there is a compromise, business will start to draw down their credit lines and you will get a bounce back for lending in the first quarter." Looking broadly at third-quarter earnings results, FactSet says that out of 123 companies among the S&P 500 ( SPX.X) that have reported so far, 67% have beaten consensus earnings estimates, while only 38% have reported sales above estimates. FactSet says that "this percentage is well below the average of 55% recorded over the past four quarters. In fact, it is the lowest percentage of companies to report sales above estimates at this stage of the earnings season since Q1 2009 (35%)."