How The Big Banks are Working the System at Your Expense (1 Viewer)

IceHot

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I just got a letter today from Kelly S. King CEO of Truist Bank (a recent merger of SunTrust and BB&T banks).

He sent the letter to try to explain away why several Small Business that applied for the PPP Loan did not get any money.

In the letter there are several white lies that are telling of the truth. First of which is that they said they started accepting applications on April 3. This is a lie at least for most of us who were forced to apply online and not given access to the online service until April 5. Some people did get applications on April 3. The rest of the letter is telling as to who those people were.

The letter goes on to explain in the first 48 hours they received 100,000 applications. They further explain that most of those 100,000 have not received money even though they have released $10 Billion.

Now lets do some math. That means even if they did process all 100,000 applications they averaged giving out $1 million to each applicant. There is no way they processed 100,000 loans. Had they done that they wouldnt need to send out a letter. It is likely closer to a third of that.

Notice though the maximum they can give out by law is $10 million to a customer. There is only one way in which you can process 100,,000 applications and get to $10 Billion and still average a $1 million per customer. The only way is to prioritize the rich clients first.

In other words if you have a payroll of $10 million in 2.5 months you went to the front of the line. And if you were a true small business you went to the back of the line.

This infuriates me.

-IceHot
 

efil4stnias

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Politically connected businesses got theirs, you get count on that

as i posted on the stimulus thread...Hancock Whitney took care of the larger accounts first. A company moving 10-20mm annually thru the bank vs 1-2mm annually go theirs and the 1-2mm got a "sorry PPP out of money" reply.

They went right to the larger commercial accounts to satisfy them and retain their business.

The smaller guys got nothing but " hey we need more documentation" - Client in Belle Chasse was asked EVERY DAY for 10 days for a new document. 10 straight days of thinking complete only to be asked for another document the following day. Delay delay til finally - oops out of $$$.

Our company applied- we compiled and submitted 211 pages of documents. No go.

Its actually quite simple...this was fraught with abuse ability from outset. It had zero oversight and no ability to reach the small mom n pops as intended. This was a simple cash grab for businesses that said " oh look free $$$"

And make no mistake. a 1% loan with first 6 mo payments deferred is NOT A PENALTY ( but the Fed Govt says it is ) lolol

its the difference between the haves and have nots. System is designed this way. Just as the market is.

IF you were around post Katrina, this should have come as NO SURPRISE.
 

Dago

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we been through this on the main thread

50 publicly traded corporations got $250 billion out of the $350 billion that was available. the construction industry, which is not even shut down, got the largest share of the money

I bank with Cap One (only because I was a Hibernia customer) and they didn't even have the application available online until the day after all the money was gone and yet they somehow made loans

I realize that everyone wants to blame Trump since he replaced replaced Neal with O'Donnel, but I don't think people get what federal oversight does. I have been dealing with it for 19 years.

Oversight is not a real time part of the process...there is no way they could have seen that banks were ignoring most applications and only reviewing the ones from companies they have on speed dial. Not on something that moved this fast

Even then, oversight can only do something if a regulation is violated and Congress did not put any regulations in this to prevent what happened. In fact, they put in loopholes that were exploited and allowed the abuse to happen in some cases (the restaurant industry)

If anybody disagrees with me, pull up the bill and show me the regulations that were violated. any time I have been contacted regarding a complaint by federal oversight, it references the applicable statute (and no, I have never done anything wrong). If a complaint is something that doesn't involve any applicable statute, then the federal oversight ignores it or informs the complainant that it isn't something they can look at

Congress forked up. Plain and simple. They can talk about what their 'intention' was all they want but without restrictions and regulations, the banks violated no laws
 

dtc

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as i posted on the stimulus thread...Hancock Whitney took care of the larger accounts first. A company moving 10-20mm annually thru the bank vs 1-2mm annually go theirs and the 1-2mm got a "sorry PPP out of money" reply.

They went right to the larger commercial accounts to satisfy them and retain their business.

The smaller guys got nothing but " hey we need more documentation" - Client in Belle Chasse was asked EVERY DAY for 10 days for a new document. 10 straight days of thinking complete only to be asked for another document the following day. Delay delay til finally - oops out of $$$.

Our company applied- we compiled and submitted 211 pages of documents. No go.

Its actually quite simple...this was fraught with abuse ability from outset. It had zero oversight and no ability to reach the small mom n pops as intended. This was a simple cash grab for businesses that said " oh look free $$$"

And make no mistake. a 1% loan with first 6 mo payments deferred is NOT A PENALTY ( but the Fed Govt says it is ) lolol

its the difference between the haves and have nots. System is designed this way. Just as the market is.

IF you were around post Katrina, this should have come as NO SURPRISE.

Our CFO filled ours out the first day which I believe was the 3rd. He had to redo it the 5th because they were all lost or whatever. Our banker held his hand and made sure it got done. We received confirmation and a prommissory note yesterday and funds are to be discharged tomorrow.

I'm not the biggest customer of the bank, but they do value us as clients.

From a bank's standpoint, I can easily see why they'd prioritize their clients with bigger needs as they get paid by size of the loan and their own downside if the larger clients fail is much higher.

I'm not sure why this is wrong or why it's surprising. I can see how it would suck if you weren't one of the big dogs or someone with at least enough clout for the bank to help you, but that's also what round 2 is for and thankfully that's been approved.

Let me put this another way.

They are trying to give away money as fast as they can with as few strings attached as possible all while not letting strippers, porn producers or drug dealers get any. That takes time. Frankly, it's amazing that it's been as quick as it has been, but with that quickness comes problems and future discoveries of fraud and misuse.

I think it's high time we grow up.
 

gavinj

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Let me put this another way.

They are trying to give away money as fast as they can with as few strings attached as possible all while not letting strippers, porn producers or drug dealers get any. That takes time.

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Dago

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Seriously? You all thought this would go another route? I mean, the POTUS fired the person who was supposed to be doing the oversight. Not like they were trying to hide it.

I don't believe the person doing oversight creates the regs...he just enforces them

and if you scan through the bill and what the treasury did, there is not a single statute or regulation to prevent the banks from doing what they did. nothing for someone enforcing oversight to cite as wrongdoing
 

bclemms

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I don't believe the person doing oversight creates the regs...he just enforces them

and if you scan through the bill and what the treasury did, there is not a single statute or regulation to prevent the banks from doing what they did. nothing for someone enforcing oversight to cite as wrongdoing
I agree. The action itself just made it obvious this was going to be a money grab through loophole exploitation. Not that I would expect anything different. When all the CO'S from big banks have a meeting with the POTUS it was like a flashing neon sign warning of no lube
 

efil4stnias

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Our CFO filled ours out the first day which I believe was the 3rd. He had to redo it the 5th because they were all lost or whatever. Our banker held his hand and made sure it got done. We received confirmation and a prommissory note yesterday and funds are to be discharged tomorrow.

I'm not the biggest customer of the bank, but they do value us as clients.

From a bank's standpoint, I can easily see why they'd prioritize their clients with bigger needs as they get paid by size of the loan and their own downside if the larger clients fail is much higher.

I'm not sure why this is wrong or why it's surprising. I can see how it would suck if you weren't one of the big dogs or someone with at least enough clout for the bank to help you, but that's also what round 2 is for and thankfully that's been approved.

Let me put this another way.

They are trying to give away money as fast as they can with as few strings attached as possible all while not letting strippers, porn producers or drug dealers get any. That takes time. Frankly, it's amazing that it's been as quick as it has been, but with that quickness comes problems and future discoveries of fraud and misuse.

I think it's high time we grow up.


im not arguing either way other than to provide context with respect to those that got vs those that didnt. Anyone can take it fwiw.

Im not decrying the banks per se- they have their own constituents they have to take care of, no doubt. You know what i do and i can tell you while i TRY to treat each client the same ( and i do get compliments ) my larger accounts get the bulk of my attention when the email or phone rings. Thats business. I get it.

What im alluding to is the lack of total oversight - shoot the banks had NO CLUE until 6 or 7 days after the CARES act passed when Powell confirmed the Feds are backing 95% - so until then, banks werent lending SHIRT til they got concrete evidence of who is doing and responsible for what.

But with that lack of oversight, comes the abuse. And there is abuse. That leaves legit small businesses out in the cold.

Even my buddy who was TOLD by his rep at Whitney exactly what i posted in the stim thread, wasnt worked up - he too understands how the bank would assist his pal moving 20mm vs him moving 2mm annually. There should have been a tier process to try and ensure that smaller businesses got something. That 20mm company didnt have to provide much in the way of documentation. Why?

So yeah i dont blame each bank rep looking to satisfy their 20mm client- shoot, if they were to even mumble words of equality, that client would have said " Well then...Fidelity is looking quite nice to move ALL my deposits to ".

Just tough for the smaller folks.
 

efil4stnias

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as i just read, Senate passes a second $484B bill of which $310 will be injected into the PPP
House expected to pass by Thursday.
so hopefully those on the smaller end will see some relief.
 

Dallas_Saint73

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I don't believe the person doing oversight creates the regs...he just enforces them

and if you scan through the bill and what the treasury did, there is not a single statute or regulation to prevent the banks from doing what they did. nothing for someone enforcing oversight to cite as wrongdoing

Correct. Typically bills will direct a regulatory agency (like the CFPB) to create regulatory requirements and enforce after an effective date is established.

I work in banking compliance. I reviewed CARES to help lenders build a software application to process PPP apps online. Business lending in general has very little supervision. CARES did not add to this (Section 1102 of H.R. 748). Additionally, the SBA did not outline a process on how to process applications. The SBA only provided minimal guidelines to apply and process requests. It is kind of like the Wild West.

Another round of funding was just approved by the Senate and is expected to pass the House later this week. I believe that this round of funding will be spread out based on asset size. So if you are a smaller bank (under 10 billion in assets) you will get X dollars. 10-50 billion in assets gets X amount. This may help stem-off large banks dipping into funds, but won't solve the issue of how community banks and credit unions spread loan funds around.

My opinion is that the SBA should put in place certain processes to make things more transparent to the public before turning E-Tran back on to process applications. Reporting on PPP activity should be mandatory and made public as well. Having regulatory enforcement would be good and probably will happen in the future for business lending, but to establish an agency or direct a current one to take on enforcement is a massive effort.
 
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Dago

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I agree. The action itself just made it obvious this was going to be a money grab through loophole exploitation. Not that I would expect anything different. When all the CO'S from big banks have a meeting with the POTUS it was like a flashing neon sign warning of no lube

Congress could have and should have put in regulations as well
I mean really....they do nothing but talk about evil Trump so why serve it up on a silver platter? They had the ability to put in restrictions as well...more than that they had an obligation to make sure this helped the people that needed it.
 

Dago

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Correct. Typically bills will direct a regulatory agency (like the CFPB) to create regulatory requirements and enforce after an effective date is established.

I work in banking compliance. I reviewed CARES to help lenders build a software application to process PPP apps online. Business lending in general has very little supervision. CARES did not add to this (Section 1102 of H.R. 748). Additionally, the SBA did not outline a process on how to process applications. The SBA only provided minimal guidelines to apply and process requests. It is kind of like the Wild West.

Another round of funding was just approved by the Senate and is expected to pass the House later this week. I believe that this round of funding will be spread out based on asset size. So if you are a smaller bank (under 10 billion in assets) you will get X dollars. 10-50 billion in assets gets X amount. This may help stem-off large banks dipping into funds, but won't solve the issue of how community banks and credit unions spread loan funds around.

My opinion is that the SBA should put in place certain processes to make things more transparent to the public before turning E-Tran back on to process applications. Reporting on PPP activity should be mandatory and made public as well. Having regulatory enforcement would be good and probably will happen in the future for business lending, but to establish an agency or direct a current one to take on enforcement is a massive effort.

Well there you go...it was a bi partisan fork up from someone involved in the process

Somehow I dont think we will see where those that have been blaming Trump will step forward and blame the Congressional members of their chosen party
 

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