Breaking News: Big Banks Unfairly Provide PPC aid
May 14, 2020
Lack of stewardship in a time of crisis.
At a time when COVID-19 is affecting millions of lives and small businesses across the country, four of America’s biggest banks have been accused of unfairly distributing Paycheck Protection Program funds to larger companies. This lack of fiduciary responsibility has resulted in harming thousands of coronavirus-hit small businesses by unfairly prioritizing emergency loan requests from large customers to earn fatter fees. The program, which launched April 3, is part of U.S. government efforts to help keep small businesses afloat during the economic crisis caused by the Covid-19 pandemic. Large National Banks have broken the trust that their small and medium-sized clients have afforded them.
Bank of America, Wells Fargo, JPMorgan Chase and US Bank were sued Sunday, April 26 for allegedly failing to process forgivable loans in the $349 billion Paycheck Protection Program (PPP) on a first-come, first-served basis. The lawsuit alleges that each bank “concealed from the public that it was reshuffling the PPP applications it received and prioritizing the applications that would make the bank the most money.”
A More Helpful Approach
Ideally, the rightful dissemination of funds should have been tied to a timely queue for the submitted applications in the order that they were received. However, the thousands of small businesses affected have now banded together in class-action status and will be looking for relief from the courts. Small Businesses now will be looking for financial partners that can provide more collaborative solutions and be more responsive to their needs. In an effort to have their financial needs served best, small businesses would be wise to consider other banking solutions.
Credit unions and smaller banks help their clients by providing useful and reliable customer support. Smaller community banks used their personal touch to directly service their business clients. Countless examples of bankers using their cell phones to text their clients PPP application status updates have been posted on social media and other common platforms where business owners communicate. Guiding your business through trying times can be simpler with a financial partner willing to provide the best tools & solutions to keep your business safe. Think about your banking partner as more than a depository relationship or a line of credit, they should be a trusted advisor and champion for your business. The little guys thus far have eaten the national banks’ lunch.
Fiduciary stewardship has never been more important than it is right now. By taking the time to explore how your current partners are providing value to help build your business, you lay a stronger foundation for when this crisis is over. The most common question business leaders are considering is when are we going to see a return to normalcy. Until that happens, now is the time to proactively align your company with better partners for a more sustainable future.
PayTech Trust has the experience and the expertise to help your business with expertly crafted merchant service solutions. We’re a full-service business process solutions company with established relationships with community banks across the US.
To begin a dialogue and learn how our expertise can serve you best, contact us today so we can help you navigate banking options to provide your business with access to emergency relief, and better service to assist your business in the future.
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