Perdue on Banks Taking Over $10 Billion in Fees from Small Business Relief Fund: “It’s the Cost of Doing Business”

Even while admitting that these loans were federally-backed and that some qualified small businesses were not able to get help, Perdue defends banks getting billions in fees from taxpayer relief program

ATLANTA — When Senator David Perdue was recently asked about a bombshell NPR report revealing that banks made “more than $10 billion in fees” from the small business relief fund — “even as tens of thousands of small businesses were shut out of the program” — he wasted no time defending his Wall Street allies: “It’s the cost of doing business.”

Despite admitting to WABE’s Emma Hurt that the loans are “backed…with a federal guarantee,” meaning banks “assumed no risk” for the loans, Perdue still refused to criticize banks for taking in billions of dollars of fees on small business relief money even as Georgia small businesses struggled to get the limited funding. Perdue even admits that “there is some frustration” from Georgia small businesses that did not get access to funds, but still would not hold banks accountable for taking billions in fees on taxpayer relief funds during a global pandemic and economic crisis.

Perdue also refused to criticize the mismanaged program for doling out taxpayer dollars to large companies as small businesses were struggling to access them, claiming that, “There’s no advantage given to large businesses,” even with recent news that publicly traded companies had taken hundreds of millions from this program.

“It’s unfortunately no surprise that Senator David Perdue is again taking the side of big banks over Georgia small businesses,” said Alex Floyd, spokesman for the Democratic Party of Georgia. “Instead of holding banks accountable for taking billions in fees from a fund for small business relief, Perdue is content to write off $10 billion in taxpayer money as ‘the cost of doing business’ while Georgia small businesses struggled to get access to needed funds.”

Read more about the banks’ so-called “cost of doing business”:

NPR: Small Business Rescue Earned Banks $10 Billion In Fees

• Banks handling the government’s $349 billion loan program for small businesses made more than $10 billion in fees — even as tens of thousands of small businesses were shut out of the program, according to an analysis of financial records by NPR.

• The banks took in the fees while processing loans that required less vetting than regular bank loans and had little risk for the banks, the records show. Taxpayers provided the money for the loans, which were guaranteed by the Small Business Administration.

• For every transaction made, banks took in 1% to 5% in fees, depending on the amount of the loan, according to government figures. Loans worth less than $350,000 brought in 5% in fees while loans worth anywhere from $2 million to $10 million brought in 1% in fees.

• In total, those transaction fees amounted to more than $10 billion for banks, according to transaction data provided by the SBA and the Treasury Department.

• To be sure, banks do collect fees when processing any SBA loan, but rarely, if ever, have banks processed this volume of loans this quickly with fees ranging past $10 billion in a two-week period. The SBA did not respond to detailed questions about the program.

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