NEW YORK–The nation’s two largest banks are in line to divvy up between $1.5 billion and $2.6 billion in fees as the result of making loans through the SBA’s Paycheck Protection Program (PPP), according to a new analysis released by two professors.
JPMorgan Chase and Bank of America, the nation’s two largest banks by assets, delivered more emergency loans than any other lenders that participated in the Paycheck Protection Program, in which more than 4,000 lending institutions in the analysis are in line to split $14.3 billion to $24.6 billion in total processing fees for PPP loans, according to Edwin Hu, at New York University School of Law’s Institute for Corporate Governance & Finance, and Colleen Honigsberg of Stanford Law School, as reported by the New York Times.
JPMorgan customers received $29 billion in PPP loans, and the bank stands to get between roughly $800 million and $1.38 billion in fees, according to the analysis.
Approximately $670-billion in funds have been made available through the PPP, with more than $100 billion remaining.
The fees lenders such as CUs earn depend on the size of the loans they make: 5% for loans less than $350,000; 3% for loans between $350,000 and $2 million; and 1% for loans north of $2 million.
Profits May be Donated
“Banks have said they don’t expect sizable profits from the program—given the cost of building out loan infrastructure and having to dedicate thousands of workers—and the biggest banks have said they would donate any profits they do make,” the Times reported. “
In a statement, a BofA spokesperson told the Times, “We will use the net proceeds of fees…to support small businesses and the communities and nonprofits we serve.”
More than 30 banks, mostly smaller ones, could earn as much from the PPP loans as they reported in net revenue for all of 2019, according to a separate analysis from S&P Global Market Intelligence. CUToday.info will have additional reporting on the S&P Global Market Intelligence findings in tomorrow’s edition.