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The big banks need to be broken up. This crisis is still more evidence that they are totally ill-suited to meeting our financial needs.
We need more small local banks instead. Just look at the differences in how they have responded to the needs of small businesses. 1/
We need more small local banks instead. Just look at the differences in how they have responded to the needs of small businesses. 1/
Bank of America, the nation’s 2nd largest, declared it wouldn’t process government relief loans for small businesses that don’t already borrow from the bank. 2/ https://www.wsj.com/articles/big-banks-favor-certain-customers-in-350-billion-small-business-loan-program-11586174401">https://www.wsj.com/articles/...
Another megabank, Wells Fargo, declared it wouldn’t participate in the small business program unless the feds lifted restrictions they’d imposed as punishment after Wells ripped off all those customers a few years ago. (It got its way.)
Online lender Kabbage, notorious for high interest rates & backed by the multinational conglomerate Softbank, suddenly cut off all lines of credit for its small business borrowers. Overnight the $ you’d expected to be able draw on for payroll, etc, gone. https://www.washingtonpost.com/business/on-small-business/softbank-backed-lender-kabbage-cuts-off-businesses-as-cash-needs-mount/2020/04/01/902f6694-7453-11ea-ad9b-254ec99993bc_story.html">https://www.washingtonpost.com/business/...
Meanwhile, local banks like this one in Philadelphia are working hard to process as many small business relief loan applications as they can. 5/ https://www.inquirer.com/business/coronavirus-ppp-sba-republic-vernon-small-business-loans-20200407.html">https://www.inquirer.com/business/...
Or this local bank in Arkansas & Mississippi, which is especially focused on black-owned businesses right now, & began processing relief loans to stabilize them even before the SBA program opened: https://impactalpha.com/how-community-banks-and-local-lenders-are-bridging-racial-gaps-in-covid-recovery/">https://impactalpha.com/how-commu...
Or the small South Shore Bank in Boston, which has its staff working double shifts. “Nothing is without risk when you’re rushing this through, but we wanted to do our part to get the money out.” 7/ https://www.bostonglobe.com/2020/04/03/business/federal-aid-small-business-off-slow-start/">https://www.bostonglobe.com/2020/04/0...
Given the responsiveness of small banks, you’d think policymakers would back them up. But you would be wrong.
Several local bankers have told me that they were locked out of the SBA’s e-portal for the first few days of the program, while the big banks were let in. 8/8
Several local bankers have told me that they were locked out of the SBA’s e-portal for the first few days of the program, while the big banks were let in. 8/8
