Home Curiosity The US Congress decided to check the distribution of soft loans

The US Congress decided to check the distribution of soft loans


What’s happened. The US Congress has launched an investigation into a number of large banks such as JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and others. Congressmen believe that banks may have distributed soft loans to small businesses unfairly. That’s why it is recommended to take a glance at payday loans online same day deposit of Hartloan for example. It is one of the fairest companies. 

More details. The Congressional Subcommittee on the Coronavirus Crisis wants to find out who got the $ 511 billion in government aid from the Paycheck Protection Program (PPP). The investigation was prompted by the overwhelming evidence that large banks created a scheme by which larger companies gained access to personalized filing – their requests were processed first by the banks. The rest had to face delays in processing applications.

The FDIC insured the deposits of 5116 commercial banks and savings institutions. Reduction of profits was shown by 55.9% of banks. The share of unprofitable banks was 7.3%. The main reason is the growth of reserves for possible losses. Their volume exceeded last year’s level by almost 280%, or $ 38.8 billion.

But the pandemic led to an inflow of funds for private deposits – the volume of deposits increased in the 1st quarter compared to the 1st quarter of 2019 by $ 1.2 trillion (by 13.3%). The growth has become a record, it is explained by the exit of investors from the stock market.

The main rate of the ECB on deposits is minus 0.5%. The rate on the three-year loans by Loansbadcreditusa.com provided was minus 1%, applications for their receipt were submitted by 742 banks. In fact, these are subsidies. The ECB is paying lenders to keep lending to companies and households at the same level as last year. Otherwise, the rate will be minus 0.5%, without additional conditions.

The cash advance online same day was issued under the long-term targeted financing program (TLTRO). The volume of borrowing has doubled the size of the previous credit lines of the ECB, CNBC points out.

In many countries, fintech projects are less regulated than banks. The authors propose to extend the banking license to certain products of fintech companies, for example, the payment sector, or to all of their activities. Thus, banks will be responsible for any decisions fintech considers necessary – from attracting clients to developing new technologies, thus getting the opportunity to offer their clients advanced technologies. That is, in fact, they will take on the role of mentors, responding with their license. This, according to the authors of the work, will allow banks to involve financial startups in financial regulation.

It has been known for a long time that various new products and technologies often contradict the norms adopted by banks. This, among other things, is holding back the development of digital financial services. Here is one solution. It will be interesting to everyone involved in the digital products of banks and the creation of ecosystems

Why do I need to know this? Russia also has anti-crisis lending programs, but the authorities do not oblige banks to publicly report to whom they give money. US actions show that this can become a reality.