Big banks and bailouts have something of a bad rap in this country, what with their outstretched hands and subsequent behavior during and following the last financial crisis. Now, in this current crisis, they’ve been given the opportunity to redeem themselves by doling out $349 billion in federal money to small businesses struggling to survive the coronavirus-induced shutdown of the U.S. economy, to learn the lessons of the last bailout in the rollout of this one. Alas, they’ve learned those lessons about as well as any others taught by previous crises.
Small-business owners have accused some of the country’s largest banks of unfairly favoring applications from their wealthiest clients for aid under a $349 billion government stimulus program…. The lawsuits — two against Chase and one each against Bank of America and Wells Fargo, all filed in the Central District of California — say smaller customers were not given the chance to apply as quickly as larger ones in some cases. In other instances, the lawsuits say, the banks sat on some smaller customers’ applications instead of immediately submitting them to the S.B.A.
Wells Fargo, you say? The bank just recently released from the asset cap imposed on it for that whole fake account scandal specifically to help out small businesses? The same Wells Fargo that has shown no compunction about screwing over said small businesses and other smaller customers in the past? Color us shocked and appalled.
The banks were supposed to handle each one as soon as it came in, not set any aside until later. The business owners who are suing say the banks did just that. Each of the lawsuits, which are seeking class-action status, claims the banks put a priority on larger loans because the banks could collect higher fees on them…. The lawsuits rely heavily on two reports that the S.B.A. issued describing the types of loans it had been processing. The most recent, on Thursday, showed far more loans of $150,000 or less going through the system than a report three days earlier. This suggests, the lawsuits claim, that the banks held off on considering many smaller loan requests until they had completed the larger ones.
OK, so that’s bad, but, like, it’s just a little delay. How bad can a little delay be?
The program ran out of money on Thursday, leaving many small-business owners wondering how they would survive.