Comments on: Bank of America to Loan An Additional $5B to Small Businesses By 2010 http://wallstreetpit.com/12896-bank-of-america-to-loan-an-additional-5b-to-small-businesses-by-2010 Tue, 22 May 2012 19:21:52 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Savings Expert http://wallstreetpit.com/12896-bank-of-america-to-loan-an-additional-5b-to-small-businesses-by-2010#comment-97079 Savings Expert Fri, 22 Jan 2010 10:33:43 +0000 http://wallstreetpit.com/?p=12896#comment-97079 It is about time that the Bank of America helped the financial situation rather than being a burden to it. This should rejuvenate small businesses throughout America and kick start our economy. It is about time that the Bank of America helped the financial situation rather than being a burden to it. This should rejuvenate small businesses throughout America and kick start our economy.

]]> By: Anonymous Banker http://wallstreetpit.com/12896-bank-of-america-to-loan-an-additional-5b-to-small-businesses-by-2010#comment-87446 Anonymous Banker Thu, 17 Dec 2009 04:16:16 +0000 http://wallstreetpit.com/?p=12896#comment-87446 Anonymous Banker: Bank of America and Chase commit to increase lending to Small Business through unsafe and unsound, deceptive and unfair credit card practices http://anonymousbanker.com/?p=579 (excerpt) You’d think that the banks would have learned a lesson on the importance of income verification from this. Unfortunately, they have not. The banks are promising a new round of lending to Small Business, and they will meet this obligation through Small Business Credit Cards. Want a credit card with a line up to $50,000? Check out Bank of America or Chase Bank. Here’s how their process works: You will be asked to STATE your “household income”. Tell them whatever you want. They won’t even ask for a tax return. Business Revenue: Banks don’t ask and they don’t care. If they do ask, they won’t verify it. So feel free to lie. Credit reporting? Sure, the bank will pull your credit report to get your credit score. But then, just like the old days, the line will disappear from the radar screen. At Chase Bank, it appears that management encourages their business bankers to sell their Small Business Credit cards by advising the business owner of the benefits afforded to them when their new credit card is NOT reported on their personal credit report. The invisible business loan all over again. Shame on them! If you have a good credit score and a personal card from Bank of America, give them a call. Perhaps they will offer you the same deal they offered me. When I called customer service, The BofA representative offered to convert my personal credit card to a business credit card because I was such a valued customer! When I assured her that I didn’t own a business, she insisted that I didn’t need one to get a business credit card. Perhaps our regulators would like to monitor the prevalence of this practice throughout the industry and prohibit the banks from circumventing the spirit and intent of the Credit Card Act. The Question is…. WHY are banks doing this? Greed! (Of course) Why would banks continue to lend without regard to any of the time-honored traditions of safety and soundness. First, unlike Revolving Small Business Credit lines, banks DO sell-off credit card exposure through securitization. The bankers, together with Wall Street, devised a way to reap the profits while, at the same time, absolving themselves of any losses. Securitization rules, in their current form, empower and even encourage banks to violate all prudent lending practices. Despite warnings released in the OCC’s Survey of Credit Underwriting Practices 2009, stating: A key lesson learned from the financial market disruption is the need for bankers to apply sound, consistent underwriting standards regardless of whether a loan is originated with the intent to hold or sell. The OCC reminds bankers that underwriting standards should not be compromised by competitive pressures or the assumption that the loan will be sold to third parties. banks continue to apply lower credit standards to forms of credit they will sell off in the market than they do to credit they will retain on their books. Just compare the banks requirements for a $50,000 Business Credit Card to a $50,000 small business revolving line of credit. The first fails to verify ANY financial information and is sold. The second verifies financial information and the risk is held by the bank. Anonymous Banker: Bank of America and Chase commit to increase lending to Small Business through unsafe and unsound, deceptive and unfair credit card practices

http://anonymousbanker.com/?p=579

(excerpt)
You’d think that the banks would have learned a lesson on the importance of income verification from this. Unfortunately, they have not. The banks are promising a new round of lending to Small Business, and they will meet this obligation through Small Business Credit Cards.

Want a credit card with a line up to $50,000? Check out Bank of America or Chase Bank. Here’s how their process works:

You will be asked to STATE your “household income”. Tell them whatever you want. They won’t even ask for a tax return.
Business Revenue: Banks don’t ask and they don’t care. If they do ask, they won’t verify it. So feel free to lie.
Credit reporting? Sure, the bank will pull your credit report to get your credit score. But then, just like the old days, the line will disappear from the radar screen. At Chase Bank, it appears that management encourages their business bankers to sell their Small Business Credit cards by advising the business owner of the benefits afforded to them when their new credit card is NOT reported on their personal credit report. The invisible business loan all over again. Shame on them!
If you have a good credit score and a personal card from Bank of America, give them a call. Perhaps they will offer you the same deal they offered me. When I called customer service, The BofA representative offered to convert my personal credit card to a business credit card because I was such a valued customer! When I assured her that I didn’t own a business, she insisted that I didn’t need one to get a business credit card. Perhaps our regulators would like to monitor the prevalence of this practice throughout the industry and prohibit the banks from circumventing the spirit and intent of the Credit Card Act.
The Question is…. WHY are banks doing this? Greed! (Of course)

Why would banks continue to lend without regard to any of the time-honored traditions of safety and soundness. First, unlike Revolving Small Business Credit lines, banks DO sell-off credit card exposure through securitization. The bankers, together with Wall Street, devised a way to reap the profits while, at the same time, absolving themselves of any losses. Securitization rules, in their current form, empower and even encourage banks to violate all prudent lending practices.

Despite warnings released in the OCC’s Survey of Credit Underwriting Practices 2009, stating:

A key lesson learned from the financial market disruption is the need for bankers to apply sound, consistent underwriting standards regardless of whether a loan is originated with the intent to hold or sell. The OCC reminds bankers that underwriting standards should not be compromised by competitive pressures or the assumption that the loan will be sold to third parties.

banks continue to apply lower credit standards to forms of credit they will sell off in the market than they do to credit they will retain on their books. Just compare the banks requirements for a $50,000 Business Credit Card to a $50,000 small business revolving line of credit. The first fails to verify ANY financial information and is sold. The second verifies financial information and the risk is held by the bank.

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