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For everyone complaining about BofA, Chase, Wells Fargo, etc. about the PPP rollout, it’s not the banks fault.
I don’t mind blaming the banks when appropriate, but they are a now a patsy for the Trump Administration’s incompetence.
See thread below
I don’t mind blaming the banks when appropriate, but they are a now a patsy for the Trump Administration’s incompetence.
See thread below
First, the rollout date for this program was set insanely short. There was not enough time for the banks to ramp up their infrastructure to handle this flow.
And the banks begged the Trump Administration to delay the rollout, but were denied. https://www.politico.com/news/2020/04/02/banks-small-business-lending-program-launch-161106
And the banks begged the Trump Administration to delay the rollout, but were denied. https://www.politico.com/news/2020/04/02/banks-small-business-lending-program-launch-161106
Second, Mnuchin didn’t get the guidelines to the banks, see article above, UNTIL THURSDAY NIGHT!
So basically the banks had no idea who they were supposed to lend to, or accept, until the night before they were supposed to have a website up, and bankers/loan officers trained
So basically the banks had no idea who they were supposed to lend to, or accept, until the night before they were supposed to have a website up, and bankers/loan officers trained
Third, the SBA itself, who actually has to approve a lot these loans and manage the funding, only has 500 employees. And they handle 60,000 loans a year. Just in the last few days, that volume has already been met.
This isn’t just the banks. The SBA itself is not prepared.
This isn’t just the banks. The SBA itself is not prepared.
Fourth, So given that the SBA is massively understaffed, even if you get an application into a major bank, the likelihood of you even seeing money in the next three months is far fetched.
No one built this system out to prepare for this. And who knows when staffing will increase
No one built this system out to prepare for this. And who knows when staffing will increase
Fifth, Wells Fargo had an “asset cap” put on them in 2018. What that means is they can’t lend over a certain amount. And this program would put them way over, if they hit capacity.
They asked the Fed Gov’t to remove it so they can help, and were denied https://finance.yahoo.com/news/wells-fargo-says-fed-cap-014342103.html
They asked the Fed Gov’t to remove it so they can help, and were denied https://finance.yahoo.com/news/wells-fargo-says-fed-cap-014342103.html
Sixth, the program was launched on a Friday. This is the most baffling. When most employees are in quarantine, and headed into a weekend, you launch the biggest SBA program of all time? Why not on a Monday when banks can prepare all weekend, and have full staffing for the launch?
So in conclusion, it’s fun to blame banks. I get that. And they deserve it for so many reason, more than I can list.
But this one wasn’t on them. This was poor planning by the Trump,Administration, and lack of thought, that led to this messy launch. https://www.nbcnews.com/business/business-news/thousands-applicants-zero-loans-trump-s-small-businesses-lending-program-n1176766
But this one wasn’t on them. This was poor planning by the Trump,Administration, and lack of thought, that led to this messy launch. https://www.nbcnews.com/business/business-news/thousands-applicants-zero-loans-trump-s-small-businesses-lending-program-n1176766
