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Small business rescue earned banks $10B in fees

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Re: Small business rescue earned banks $10B in fees

#101

Post by bmelton »

jhwang5 wrote: post #62
eezurr wrote: post #9

That's about a 2% fee which doesn't seem out of line with other transaction processing fees that are out there. That fee probably has built in insurance for fraud and other failures. And also the cost of the transaction. I bet that fee is the same fee as a year ago?

This is the wrong way to think about it. Rates are nearly negative, so 2% is practically 10, 100X the rates banks can earn otherwise. It's basically free money shoveled into banks, a massive boon.

Genuinely curious how federal interest rates have any relation whatsoever to fees for service and why they're being correlated here.

An uncharitable reading might assume a spurious correlation.

Re: Small business rescue earned banks $10B in fees

#102

Post by MiroF »

_curious_ wrote: post #91
rapind wrote: post #77

Earlier quoted context omitted.

Instead of all the fuckery, imagine if the government just sent everyone a monthly cheque with the only criteria that they are a living breathing adult with a US address. Universal trickle up.

Imagine if you lived with an attitude like this...entitled to something just for being born. Genuinely curious: where does this come from?

Most theories of the good hold that you are certainly entitled to things just for being born - take your life for instance.

Your alternative conception is far outside the norm.

Re: Small business rescue earned banks $10B in fees

#103

Post by _curious_ »

jhwang5 wrote: post #62
eezurr wrote: post #9

That's about a 2% fee which doesn't seem out of line with other transaction processing fees that are out there. That fee probably has built in insurance for fraud and other failures. And also the cost of the transaction. I bet that fee is the same fee as a year ago?

This is the wrong way to think about it. Rates are nearly negative, so 2% is practically 10, 100X the rates banks can earn otherwise. It's basically free money shoveled into banks, a massive boon.

"It's basically free money shoveled into banks, a massive boon." A wall street bailout disguised as a main street bailout.

Re: Small business rescue earned banks $10B in fees

#105

Post by vernie »

gadders wrote: post #34
eezurr wrote: post #9

That's about a 2% fee which doesn't seem out of line with other transaction processing fees that are out there. That fee probably has built in insurance for fraud and other failures. And also the cost of the transaction. I bet that fee is the same fee as a year ago?

Doctors aren't working for free, so I'm not sure why bank employees are expected to.

Actually this is normal and good.

Re: Small business rescue earned banks $10B in fees

#106

Post by SilasX »

toomuchtodo wrote: post #23
tyre wrote: post #21

Earlier quoted context omitted.

You’re describing “narrow” banks. While they make sense for consumers, our banking system is tightly coupled with another: mortgages. The money that you deposit is loaned out. Could the federal government do the too? Sure, and the government (talking about the US here) does end up owning a large chunk of mortgages via Fannie Mae and Freddie Mac. But the expertise and the manpower around vetting the mortgages is a _lo…

It is rare today that banks hold mortgages and use depositor funds to fund them. Most (government backed, such as FHA, Fannie, and Freddie) mortgages are securitized and sold on the secondary market to bondholders (there are caveats for small banks, credit unions, and non-qm lenders). A narrow bank does not require lending to service deposit accounts. It doesn't even need to pay interest to account holders. It simply…

Really? You mean, even an existing (approved) bank can't just one day decide to stop lending and revert to narrow functions?

Re: Small business rescue earned banks $10B in fees

#107

Post by the_watcher »

jhwang5 wrote: post #64

Bank charging 2% on this flow is criminal, in the sense that interest rates are nearly negative, so 2% is practically 10, 100X the rates banks can earn otherwise. It's basically free money shoveled into banks, a massive boon.

If they're charging interest, their fees would be a lot higher than 2%.

Re: Small business rescue earned banks $10B in fees

#108

Post by CPLX »

RivieraKid wrote: post #99
lordnacho wrote: post #3

Gotta ask whether the banking system makes sense in its current form. - Part of it is actually a utility. Payments, sending money from one place to another, making sure there's an account at the other end of that number. Everyone needs this, yet being a huge international network there isn't a whole lot that one bank offers that another cannot. - Part of it is deciding who to lend money to. Makes sense for the bank t…

I don't think it's a good idea, the government sector is usually less efficient than private sector. It would only make sense if the banking market was not competitive but it's not the case.

> the government sector is usually less efficient than private sector

Statements like this require proof.

Re: Small business rescue earned banks $10B in fees

#109

Post by _curious_ »

antoncohen wrote: post #61

Lawsuits claim banks prioritized loans to large businesses. JPMorgan disputes those allegations, claiming it processed loans fairly. By fairly it means it put all the small business loans in one large FIFO queue, and all the large business loans in a separate much shorter FIFO queue. Effectively prioritizing large business loans.

Interesting...what are your sources here?

Re: Small business rescue earned banks $10B in fees

#110

Post by toomuchtodo »

SilasX wrote: post #106
toomuchtodo wrote: post #23

Earlier quoted context omitted.

It is rare today that banks hold mortgages and use depositor funds to fund them. Most (government backed, such as FHA, Fannie, and Freddie) mortgages are securitized and sold on the secondary market to bondholders (there are caveats for small banks, credit unions, and non-qm lenders). A narrow bank does not require lending to service deposit accounts. It doesn't even need to pay interest to account holders. It simply…

Really? You mean, even an existing (approved) bank can't just one day decide to stop lending and revert to narrow functions?

They could, but would see a reduction in income by doing so, therefore an unlikely occurrence. I don’t see many banks willingly walk away from low risk income.
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