In another big FU to small businesses that are desperate for these PPP loans, banks issuing the loans made $10 billion in fees, according to an NPR investigation. That's a huge amount of money that could have helped so many more small businesses that are in crisis right now.
Banks handling the government's $349 billion loan program for small businesses made more than $10 billion in fees — even as tens of thousands of small businesses were shut out of the program, according to an analysis of financial records by NPR.
The banks took in the fees while processing loans that required less vetting than regular bank loans and had little risk for the banks, the records show. Taxpayers provided the money for the loans, which were guaranteed by the Small Business Administration.
I wrote about my frustrating odyssey into just trying to get an application submitted not just to my bank, but several other institutions.
Banks and other financial institutions are not lending their money, but American taxpayer money that has been guaranteed by the federal government.
For every transaction made, banks took in 1% to 5% in fees, depending on the amount of the loan, according to government figures. 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.
This explains why so many small businesses were shut out of the loan program. Why not cap the fee at 1%?
Watching Steve Mnuchin gaslight reporters about the $349 billion stimulus package yesterday during a Trump rally/presser made me sick.
Why are banks receiving such exorbitant fees for being a middleman during a pandemic which is leading into an economic shutdown?
Do you think Wells Fargo or Bank of America didn't understand this principle? Of course they did, and they did what they always do: made way more money for themselves (with the help of the Trump administration,) off the backs of struggling Americans, at the expense of people who really need the help — small business owners.