JPMorgan Chase & Co. and Bank of America Corp. are in line to split between $1.5 billion and $2.6 billion in fees for being the conduits of the government’s aid program for small businesses stricken by the coronavirus shutdown, according to an analysis of newly released data, the Wall Street Journal reported. The nation’s two biggest banks by assets delivered more emergency loans than any other lenders that participated in the Paycheck Protection Program and the two are set to earn the biggest fees as well, according to a review of disclosures made on Monday by the Treasury Department and Small Business Administration. In total, the more than 4,000 lending institutions in the analysis are in line to split $14.3 billion to $24.6 billion in 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. The PPP has delivered more than $520 billion in loans meant to soften the economic blow of the novel coronavirus. The loans can be forgiven if businesses spend the money on certain expenses like rent or payroll, though businesses have said the process is confusing. It is common for banks to be compensated for facilitating loans made under government programs. What sets PPP apart is its size: The high end of the range of PPP fees lenders can earn exceeds the total size of the SBA’s flagship lending program in the 12 months ended Sept. 30. Banks have said they don’t expect sizable profits for the program. Getting their systems up-and-running quickly required diverting thousands of workers to help with applications and building new software to manage the process.
