Massive Banks Take Small Business Cut Funds In Food Frenzy Zoom Fintech

Graphic: Finnovating Twitter account.
When Congress handed over the $ 2 trillion coronavirus reduction bill last month, it included $ 500 billion in “business aid” – tax credit, secured loans and the like, giving a significant increase to falling stock market, according to the Wall St. Journal. It was only a reward granted by the authorities to large companies. The loan program arrived with no obligation for beneficiaries to keep employees on payroll and no restrictions on share buybacks, dividends, or government salaries. For example, as much as $ 17 billion went to already cash-rich Boeing, the world’s largest aerospace company, to provide “national security,” pushing its inventory up 24%. That did not stop Boeing from announcing a layoff of 16,000 employees shortly after.
Such freebies were not enough for Company America, which further observed that Congress had allocated $ 350 billion to small businesses. They noticed that these funds had a big loophole. Money that could have been distributed to hundreds of specific small businesses determined to stay afloat could be administered by large banks, such as JP Morgan Chase & Co., Financial Institution of America, Wells Fargo & Co, and Citigroup. The very concept that banks wouldn’t reap the benefits of this is like trusting a hungry Godzilla not to eat your cat.
Billed $ 10 billion in processing fees
It was a giveaway from the authorities to the banks, which made a quick $ 10 billion in processing fees alone on loans. They defined that they paid themselves for the “complicated verification procedures” required to process each piece of software. This is unusual, because the federal authorities have insured each loan, required much less control than regular loans, and presented no danger to the banks concerned.
These banks also restricted access to small business funds to everyone but their wealthiest buyers. Almost all of the personal and business banking buyers who used a small business loan purchased one, while only one in 15 potential retail bank customers who applied for a loan purchased one. JP Morgan, the largest financial institution in the country, even created two registration lines for loans, one reserved for its biggest buyers.
The federal government is adept at setting up funds for working class people and especially people in the shadows. The Crimson Ribbon is a proven strategy to discourage applicants for loans, UI, disability assistance, or other wanted social benefits. This is usually a strategy to discourage voting by making necessities complicated and entry more difficult. This identical tactic has been used by banks against small banks and businesses.
It’s a simple approach for banks to ensure that their own wealthy prospects get priority service. Loans for current customers purchased in a simple and fast way. Small businesses, especially those owned by shadow people, have been bought out. Already wealthy pet buyers had not been overlooked.
For example, the Fisher Island Neighborhood Affiliation, a personal members-only island near Miami and accessible only by helicopter, was accepted for a loan of $ 2 million. Nikola Motors, a $ 3 billion trucking company, got $ 4 million; Ruth’s Chris Steak Home, a 150-zone series, got $ 20 million. One company bought $ 60 million and used $ 10 million to pay dividends to its buyers. The list goes on and on.
It sparked a great deal of outrage that ten California companies, as well as two legislative firms, filed class actions alleging that major banks comparable to Wells Fargo and Financial Institution of America prioritized applicants for larger loans as part of the federal small business’s $ 349 billion emergency COVID-19 reduction program. The money seizure scandal has prompted some companies to swear to return some of the funding with the intention of calming down.
More cash for small businesses
With so many outstretched hands around the world, it’s no wonder the $ 350 billion program is strapped for cash and hundreds of small businesses are being left out altogether. About a quarter of small businesses have already closed, according to a survey of 500 companies launched on April 24 by the US Chamber of Commerce and MetLife. The results on workers of this are only partially reflected in the big unemployment figures.
It didn’t have to be that dangerous in any way. For example, in capitalist Germany, which has a powerful working class movement, common medical insurance and a strong social security network have made this nation considerably better able to withstand the results of the pandemic.
In response to the Chicago Tribune, “Germany’s aid program is designed to keep the unemployment rate low and allow workers to return quickly when possible. As Washington sends one-time stimulus checks to Americans, the German government’s plan pays at least 60% of the wages of employees with reduced or no hours.
Capitalism is theft. While reforms like these in a number of European countries could be achieved through struggle, nowhere is the brutal side of capitalism more evident than in the United States. The media like to play the air of loyalty to the nation, but the ruling elite is only loyal to itself.
Their patriotic propaganda is fair to the rest of us – below 99%. The capitalists do not imagine it for a minute. They only worship the god of the greenback, and so they don’t just take from the working class and the oppressed, they take from the middle class, they take from small businesses and therefore they even steal from each other. Their greed has no limit.

About Dawn Valle

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