Tens of thousands of first responders, medical personnel, grocery store clerks, street cleaning crews, postal service workers and countless others have been risking their lives to ensure that our communities’ basic needs and critical care is being delivered during this unprecedented pandemic. Meanwhile, America’s big bankers have spent the past month pursuing profits at the expense of millions of small businesses.
That’s right, big bankers. All of you should be ashamed of yourselves.
You know who are, and you know what you did. As your executives and employees sit in their suburban homes, attending dozens of Zoom meetings while sipping lattes and complaining about the headaches of homeschooling their kids and not being able to get fresh kale from their local Whole Foods, the rest of the country – the 30 million small business owners who employ more than half of the workforce and who have been forced to lay off millions in the wake of shutdowns and decreased sales – are sitting on their thumbs waiting for you to do your jobs. Has the banking community – particularly large banks – done their job?
No, they certainly have not. Have they been working “so hard,” as some have told me? Oh, please. I’m not sure how many hours these people are putting in, but I’m betting none of this is getting in the way of their Netflix binging and Grubhub deliveries. I do know one thing, however: The banks have earned lots of profits off the backs of their small business customers. How? In many shameful ways.
Let’s start at the beginning, March 27. That’s when the CARES Act was signed into law along with the Paycheck Protection forgivable loan program. The entire success of this desperately needed funding rested on the shoulders of the banking community, which was chosen as the conduit for the funds. Funds that would be guaranteed by the Small Business Administration (SBA), by the way.
So did the big banks see this as an opportunity to step up and provide a service arguably as important to the economy as first responders’ services to the health care system? Did they see the chance to forge relationships with small businesses, many of which could be great customers in the future? Not at all.
Instead, those big banks, having a full week to prepare for the program’s launch on April 3, deferred while they demurred. They grumbled at holes in the guidelines and technical challenges. They held up applications while they “negotiated” with the Treasury Department.
Meanwhile, many smaller community banks plowed forward. They knew that getting the money to small businesses was more important than figuring out how some of the I’s would be dotted. And besides – did I not mention? – the government was guaranteeing the money anyway!
Then came the next slap in the face of small businesses: It was communicated that the big banks would be doling out these loans only to their existing customers. That pronouncement came even as the Treasury, the SBA and Sen. Marco Rubio (R-Fla.) publicly reminded them that not only was that not part of the deal, but the loans – did I not mention? – were guaranteed by the government.
But the big banks ignored these pleas. Which meant that countless small businesses that had already applied to some of these places were told “no thanks” and were forced to start at square one somewhere else. Many of those applicants are still waiting on funding as I write this. Hopefully, they’re still in business.
Next came the allegations that the big banks favored their larger clients over small businesses. Hey, why not? Those larger companies earned the banks larger fees and will undoubtedly show their appreciation in the long term with more lucrative deals. And who gives a flying you-know-what about that mom and pop restaurant that’s banked with them for the past 20 years? It’s follow the money, honey. Which is exactly what the big banks did, securing loans for their best and biggest clients while ignoring the small fish who didn’t earn them much anyway.
Oh, and those larger companies? Turns out there were hundreds of them that are publicly held, and none of those executives seemed to have any moral compass about taking these funds either. The money was there, so let’s just grab it — to hell with the small businesses that really needed it.
Quick question: Who was the conduit, the connector, the middle man that enabled these ethically bankrupted companies to wet their beaks? You guessed it! It was the big banks of course. Did any banker – required to be in the middle of these transactions – advise their clients that doing so may not be the right thing to do? Did any banker instead make funds available to these larger, better capitalized corporations so that more funds could be available to small businesses needing dire assistance? Of course not.
You know who I do feel sorry for? I feel sorry for the poor people working in these banks’ public relations departments. They’re nice people just trying to do their jobs. I also feel sorry for the bank employees who know that their bosses behaved so poorly and still have to support them in order to keep their jobs.
“Hey,” as Tony Soprano always liked to say. “Whaddya gonna do?”
For all these years, America’s big banks have been telling America’s small businesses just how much they care about them and how much they want their business. But now, when the chips are down, we get to see their true colors. Turns out they couldn’t care less about small businesses. Which is why I hope many small businesses take their business to smaller community, independent and regional banks and consider other fintech providers that provide quicker, more affordable service.
The big banks, through their shameful behavior, have earned this response almost as much as they’ve earned our disgust.
Gene Marks is founder of The Marks Group, a small-business consulting firm. He frequently appears on CNBC, Fox Business and MSNBC.