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.
Small business rescue earned banks $10B in fees
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Re: Small business rescue earned banks $10B in fees
#62That'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.
Re: Small business rescue earned banks $10B in fees
#63Earlier quoted context omitted.
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.
Are you talking about the US post office? The post office in France already offer banking. It's mandated by law as a public service and they can't reject customers. It doesn't offer the more complex products or investments though, it ain't their purpose. Not sure about the UK post office. Seem to offer a lot of banking services and cards, but it says it doesn't do current accounts anymore.
The UK Post Office did offer banking. Not sure if it survived Thatcher..
Re: Small business rescue earned banks $10B in fees
#64Bank 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.
Re: Small business rescue earned banks $10B in fees
#65Earlier quoted context omitted.
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.
I could not imagine the amount of financial, operational, technological and regulatory infrastructure that would need to be ported over, however.
It's not that hard. Just assume control of some bankrupt bank or even contract out the backend, and put terminals in post offices. When Bank of America merged with a few others, they actually operated several of the old banks at once for awhile.
Medicare uses the latter model for claims processing -- big insurance companies bid on processing, subrogation, etc.
Re: Small business rescue earned banks $10B in fees
#66Earlier quoted context omitted.
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.
Germany did that (post bank) didn't want so well...
Post Bank formed from Deutsche Bank. Which was made infamous for loaning Donald Trump loads of money on highly questionable terms.
Re: Small business rescue earned banks $10B in fees
#67The 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.
What incentive does bank have to actually do due diligence, when the loans are all guaranteed by government?
Re: Small business rescue earned banks $10B in fees
#68The 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…
Banks do that for many programs. For many different services, banks function as a less efficient and more expensive bureaucracy than the government itself.
Re: Small business rescue earned banks $10B in fees
#69Anytime needed stimulus goes through banks, don't be surprised if it never makes it out of said bank or to the intended locations as they are self-preservation first as expected. Banks should help the river and get access to the flow, they shouldn't be a dam that holds back the flow, filtering only for their customers or large companies masquerading as "small business". Had policy sent the money directly to companies…
Can someone who downvoted this explain why you did so?
Doesn't fit on the screen?
Re: Small business rescue earned banks $10B in fees
#70Earlier 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.
Every decade this will playout now. If recessions actually helped reduce income inequality and directly triggered UBI or some other system, more like the types of policies that were enacted after the Great Depression, you can bet there would be many less recessions. As of right now, it is an every decade, or maybe less now, wealth extraction market raider party. Why wouldn't there be as nothing in the market or polic…
I am enraged that Bernie Sanders was denied this opportunity. In my humble opinion, it's still better to write in and vote for him than for Trump or Biden. A tax on those making more than 5 million? Is that a sick joke? What wealthy person got there with a salaried job? Tax investments. Tax asset holding groups. Tax anything but jobs and homes, you monsters!