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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

#41

Post by lmeyerov »

lonelappde wrote: post #12

The headline misses the point. The total means nothing out of context. What's the fee per loan? >Loans worth less than $350,000 brought in 5% in fees while loans worth anywhere from $2 million to $10 million brought in 1% in fees. I've read that the average loan is $50K, so that's $2500 per loan, which seems high, And 1% of a $1millio loan is ridiculous, as it's not subsidizing the smaller loans, AND these loans are…

The root problem was Trump team didn't put in enough money, included too many rich businesses, and didn't require a fair order. Banks knew they didn't have enough meat yet were feeding a frenzy: of course the big dogs pushed through to the front.

So now we blame Banks instead of Trump. Yet if Trump repeats the plan without prioritizing actual small businesses, the co's big enough for in-house accountants and big loan relationships will keep getting the lion's share.

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

#42

Post by covidacct »

seph-reed wrote: post #29
Ididntdothis wrote: post #25

Earlier quoted context omitted.

There will be plenty reporting about corruption and nothing will happen. This is just a continuation of 2008. People have accepted this corruption as normal.

I solemnly swear to stand by those who fight corruption, even when they go too far I will recognize and respect their intent, I will remember them as heroes, and I will do everything I can to make their sacrifice not be in vain.

Xi Jingping consolidated power by rallying people around the flag of anti-corruption. Same with Putin. Obviously, neither of those people is anywhere close to non-corrupt.

Don't rally around anti-corruption. Rally around accountability, oversight, openness, and balances of power.

Doing things right is harder than calling out others for doing things wrong, and plenty of horrible corrupt people are all too happy to call out wrong-doers. Support people who do things right, not people who complain about others doing things wrong.

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

#43

Post by agilebyte »

tempsy wrote: post #38

The thing here is the bank isn’t taking any risk here. All the loans are guaranteed by the government. So banks are really just a middle man that is transferring money from the SBA to a small business’s bank account and taking on zero credit risk. The government has the ability to send funds directly to people obviously...that’s how they are sending the stimulus checks and send tax refunds. Banks are basically being…

Paperwork AND doing due diligence on the companies more effectively than the government can right now.

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

#44

Post by slezyr »

theplague42 wrote: post #6
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…

There have been suggestions over the years for the post office to offer banking services. They have branches literally everywhere, they're independent yet still a government agency, and have no profit motive.

In Ukraine we used mail mans to deliver pensions, that was horrible for them. Almost every year they were assaults in which they died. They represent a simple target as they don't have means to protect themselves.

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

#45

Post by MR4D »

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…

People always seem to miss this key point:

The central bank is not a regular bank, it’s a “reserve” bank. Very different function.

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

#46

Post by dependenttypes »

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…

Right now as things are Banks are just leeches offering minimal value to the world yet receiving a lot of income.

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

#47

Post by tempsy »

agilebyte wrote: post #43
tempsy wrote: post #38

The thing here is the bank isn’t taking any risk here. All the loans are guaranteed by the government. So banks are really just a middle man that is transferring money from the SBA to a small business’s bank account and taking on zero credit risk. The government has the ability to send funds directly to people obviously...that’s how they are sending the stimulus checks and send tax refunds. Banks are basically being…

Paperwork AND doing due diligence on the companies more effectively than the government can right now.

The point is the amount they are earning is overly generous for the work completed.

Most banks are only working with existing customers, so the DD is 99% complete. Few are reviewing applications from brand new clients.

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

#48

Post by eezurr »

solarhoma wrote: post #32
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?

Yes but these fees are huge with larger loans. Why are the fees percent based rather then flat rate? The banks giving out these loans are not taking on any risk with the loan. So how are they getting away with large fees associated with the loans?

Because successful fraud takes everything.

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

#49

Post by Betelgeuse90 »

theplague42 wrote: post #6
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…

There have been suggestions over the years for the post office to offer banking services. They have branches literally everywhere, they're independent yet still a government agency, and have no profit motive.

There's a postal service bank in Israel as well. Lots of people use it, it's a fine service. They also offer fantastic foreign exchange rates, pretty much the best I think.
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