Yep, you caught me. The big banks are paying me a fat check to argue with you on the Internet.
What I said was that fractional reserve banking does not create money out of thin air. It increases the available supply of money to borrowers by letting big banks exchange excess reserves which allows them to lend more money. Lending that money is a value add to the economy. Credit availability increases economic activity for consumers and business owners alike. But the Fed has regulatory control because they set the interest rates on the federal funds market. That’s not creating money “out of thin air.”
It still increases the money supply and causes malinvestment. So, while it technically doesn't "create money out of thin air" like the FED can do, it still essentially creates money out of thin air.