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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

#141

Post by celticninja »

brentm wrote: post #133

Not a popular opinion but considering the effort involved, should they not have earned fees? Should they have donated their time and resources? I'm sure it took a monumental effort to pull it together with the lack of clarity being handed down and the volume of loans to process in a short period of time. If the government wanted to do for $0 fees they would have figured out how to do it themselves. If a private busin…

could they have done it at cost? Yes. Did they need to make a profit off this? Probably not. Are they relatively unaffected (due to prevalance of online banking and also reduced costs due to physical banks being closed)? Yes.

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

#142

Post by mathieubordere »

brentm wrote: post #133

Not a popular opinion but considering the effort involved, should they not have earned fees? Should they have donated their time and resources? I'm sure it took a monumental effort to pull it together with the lack of clarity being handed down and the volume of loans to process in a short period of time. If the government wanted to do for $0 fees they would have figured out how to do it themselves. If a private busin…

you think that an administrative fee of approx $20K per transaction is reasonable?

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

#143

Post by ss7pro »

Problem with the banks (and many other huger corporations in US ie: airlines) is that during prosperity all the profits are going to narrow set of people (board and investors) but during the crisis there's always bailout using taxpayers money to save them. It essentially means that profits stay with the wealthy while losses are being spread across the poor. This is no longer capitalism but communism where they ruling party (boards and investors) are getting richer without the risk.

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

#144

Post by anotheracct_ »

brentm wrote: post #133

Not a popular opinion but considering the effort involved, should they not have earned fees? Should they have donated their time and resources? I'm sure it took a monumental effort to pull it together with the lack of clarity being handed down and the volume of loans to process in a short period of time. If the government wanted to do for $0 fees they would have figured out how to do it themselves. If a private busin…

shit hacker news says

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

#145

Post by toobigtoexist »

volak wrote: post #119
viklove wrote: post #82

Earlier quoted context omitted.

So businesses are not a charity, but the US taxpayer is? Why do we keep sending money into the banking system with no strings attached? In 2008 as well as now, banks have collected billions of dollars with no strings attached, and engaged in fraud and corruption with no consequences. Doctors are not working for free, no, but they also didn't just vacuum up 10B of cash meant for patients either. Only the banking syste…

This program is vastly different from the 2008 bailouts. The banks collected a modest fee for doing work spreading money around to people who need to pay employees and rent. In this situation the banks are simply a truck driver and small businesses are your local grocery store. Im not going to fault the truck driver for asking to be paid to do work. The 10B they collected was not from the government - it was paid by…

Except, if the truck driver consistently fails to deliver the goods, the truck driving company usually goes out of business. It is generally referred to as having actual skin in the game.

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

#146

Post by antoncohen »

_curious_ wrote: post #109
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?

This article and the Bloomberg article[1] that is currently on the front page.

From this NPR article:

> We funded more than twice as many loans for smaller businesses than the rest of the firm's clients combined," the bank said in a statement to clients. "Each business worked separately on loans for its customers. Business Banking, Chase's bank for our smaller business customers, processed loan applications generally sequentially"

Note "Each business worked separately on loans" and "processed loan applications generally sequentially". They divide their consumers up into large business and small business groups, assigning dedicated staff to each group. There are far more small businesses, making the queue for small businesses much deeper. Even though there were more workers (staff) pulling from the small business queue, there weren't enough to make up for the discrepancy in queue depth.

From the Bloomberg article:

> More than 300,000 customers of JPMorgan’s business banking unit, which serves smaller firms, applied for loans through the Paycheck Protection Program

> By comparison, about 5,500 larger, and sometimes more sophisticated, customers of the commercial banking business applied for funding.

> The data reveal that, in the race to get a loan in the first-come, first-served program, larger businesses had a leg up over smaller ones -- even when applying through the same bank.

> its commercial bank, with fewer clients, was able to process applications faster, said a person familiar with the matter.

[1] https://outline.com/HacVTV

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

#147

Post by volak »

ss7pro wrote: post #143

Problem with the banks (and many other huger corporations in US ie: airlines) is that during prosperity all the profits are going to narrow set of people (board and investors) but during the crisis there's always bailout using taxpayers money to save them. It essentially means that profits stay with the wealthy while losses are being spread across the poor. This is no longer capitalism but communism where they ruling…

The best analogy I use for logical errors such as this is -

If you have a dependent - ie a child - whom you are a primary source of care. Should you qualify for a bigger helping hand than say, the 25 year old with no children?

If you agree - then now imagine you have 500 dependents. Or in the case of some corps 500,000.

You have half a million dependents who rely on you every other week for a paycheck.

Do you qualify for a larger helping hand than the 25 year old who lives alone?

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

#148

Post by joncrane »

celticninja wrote: post #141
brentm wrote: post #133

Not a popular opinion but considering the effort involved, should they not have earned fees? Should they have donated their time and resources? I'm sure it took a monumental effort to pull it together with the lack of clarity being handed down and the volume of loans to process in a short period of time. If the government wanted to do for $0 fees they would have figured out how to do it themselves. If a private busin…

could they have done it at cost? Yes. Did they need to make a profit off this? Probably not. Are they relatively unaffected (due to prevalance of online banking and also reduced costs due to physical banks being closed)? Yes.

Are physical banks closed? Wouldn't banks be an essential service?

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

#149

Post by allendoerfer »

yardie wrote: post #124
luckylion wrote: post #86

Earlier quoted context omitted.

No, Post Bank was sold to Deutsche Bank. It was created by the Deutsche Post, who then spun it off, funneled a lot of their branches into it (so you have bank offices that also rent out a desk to the Post) and sold it to Deutsche Bank.

I looked at the wikipedia post for Post Bank and it is really confusing. So on re-reading I see: 1990 Postbank is created from Duetsche Post breaking up. 1999 Deutsche Post takes back Postbank. 2004 Deutsche Bank sells it's transaction bank to Postbank. 2012 Deutsche Bank acquires Postbank.

I think the name Deutsche Bank makes it even more confusing. As opposed to Deutsche Telekom (T-Mobile), Deutsche Bahn (DB/Schenker/Arriva) and Deutsche Post (DHL), Deutsche Bank never was state-owned. It was just named that way, because it was founded as a project (and arguably still is) so Germany would play a role on the world financial stage.

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

#150

Post by jhwang5 »

wutbrodo wrote: post #87
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.

Why would annual interest rates be a relevant baseline for a transaction fee?

Because banks borrow short, lend long. This is an exogenous fee generating bonanza for banks. It’s not that much different from someone selling you masks at a steep price. issuing these loans do not cost banks anywhere even close to what they charged.
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