Bad Bankers Are How Big Business Beats Small Business, But Congress Can Fix It

1. In the last three days of [the Paycheck Protection Program], or just when funds began to run low, the lawsuits notes, banks processed loan applications for $150,000 and under at twice the rate of larger loans. According to the plaintiffs, this indicates that the larger loans had been pushed to the front of the line.
2. There are reasons major companies got massive loans from the Senate's small business bailout while thousands of small businesses that applied the first day funds were available were told there was no money left.
3. The federal coronavirus bailout has first-come-first-serve rules that kick in once a bank sends a loan application to the government's Small Business Administration (SBA), but in the interest of speed amid a crumbling economy and under an intense lobbying campaign from corporate interests, the end text of the law was vague at best on how banks are required to treat applicants before sending their requests to the SBA.
4. There are reasons major companies got massive loans from the Senate's 'small business' bailout while thousands of small businesses that applied immediately were told there was no money left.
5. A series of class-action lawsuits filed Sunday in Los Angeles allege that four banks  Wells Fargo, Bank of America, J P Morgan Chase, and US Bancorp  rushed loans to the biggest businesses to maximize their earnings.
6. The whole problem, though, begins with Congress, which chose the banks as the avenue for the unprecedented government bailout and then, either under pressure from time, lobbyists, or both, failed to set strict parameters, and who so far have not allowed small businesses any legal recourse for how their fates are dealt out.
7. Banks, the suits explain, earned 5 percent on loans of up to $350,000; 3 percent on loans between 350,000 and $2 million; and 1 percent on loans between $2 million and $10 million or up to $17,500 for the smallest set, and up to $100,000 for the larger set.
8. Although Bank of America reversed its loan-history policy under public pressure, compounding computer and process errors at large banks ended up leaving some of the neediest as well as the most responsible small businesses in the cold.
9. Some larger companies like Bank of America took this a step further, requiring that businesses seeking loans have a history of owing them money checking, savings, and employee retirement accounts would not suffice.
10. The banks were never an ideal avenue to deliver the Paycheck Protection Program, if there is such a thing as an ideal avenue, but Congress chose them because they are already in the business of making loans.

https://thefederalist.com/2020/04/22/bad-bankers-are-how-big-business-beats-small-business-but-congress-can-fix-it/