(TargetLiberty.org) – To help businesses continue to operate amidst the pandemic, the CARES Act set up a loan program. The initial program is now out of money pending the new stimulus package currently waiting for House approval. Despite being hopeful, many small businesses did not get the help they needed. Now, it turns out part of the reason is banks allegedly raked in exorbitant fees for handling these loans.
The Small Business Association (SBA) promised banks processing fees ranging from 1 to 5% based on the size of the loan. According to NPR, who analyzed the program’s financial records, bank fees totaled about $10 billion.
So, everyone was upset about Ruth's Chris and Taco Cabana getting #PaycheckProtectionProgram
Loans, who was the biggest winner?
Banks like Bank of America, Wells Fargo and Chase making $10B off these loans.
Meanwhile people are going out of businesshttps://t.co/Yp8C5Fl95l
— 𝗝𝗮𝗺𝗲𝘀, 𝗧𝗵𝗲 𝗡𝗼𝘁𝗼𝗿𝗶𝗼𝘂𝘀 𝗕𝗮𝗻𝗸𝗲𝗿 (@BankBetterGuy) April 22, 2020
In a lawsuit filed Sunday on behalf of small business owners, Wells Fargo is accused of unfairly prioritizing loan applications based on loan amounts when they were supposed to be handled on a first-come, first-served basis. The suit alleges this allowed the bank to collect more in fees on the larger loans.
These fees are ultimately being paid for by American Taxpayers. While the loans were designed to help small businesses, it seems like big banks may have been the real winners.
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