Bank of America sets sights on new victims: small businesses.

[dixiegrrrrl]

Remember that BOA was in the thick of the mortgage fraud biz, when it turned home loans into bonds, sold them off, and later got caught when those bonds were found to be mostly worthless?

Now, this:
Bank of America (BAC) will hire more than 200 small-business bankers this year, expanding that lending team by at least 20% for a third year in a row.

During 2013, it extended $10.9 billion in credit to small businesses, up 26% from 2012, and said it plans to continue expanding its small-business unit, the lender said in a statement.

BofA and other banks are switching from mortgage loans toward business loans as the housing recovery matures.

On Monday, the Federal Reserve released a survey of loan officers finding that U.S. banks loosened credit standards late last year, making it easier for small businesses to get loans.
http://news.investors.com/business/020414-688770-bank-of-america-hires-200-more-small-business-bankers.htm

we've seen this movie before.

It was loose credit standards that allowed banks to make dodgy loans which led to mass defautls when the housing bubble popped.

[Xolodno]

1. When banks got deregulated...

...they fired all their economists. They didn't want to be told of repercussions of a bad strategy. To justify their "business plans" they hired people who knew nothing about economics but knew enough about math to create the "forecasts" they wanted.

I remember reading an article ages ago when this happened, it quoted one engineer (yeap...and engineer) who said, "I don't understand why the previous economists didn't use this data? There is a wealth of it here".

I shook my head after I read that. Did he not think there was valid reason as to why they didn't use it? Such as using too many similar variables that it pads your numbers? Or maybe there was no correlation, but when used, gives you the result you want? Heck I did this in my Econ Stats class just for fun....I proved that the Mexican Peso would be more valuable than the US Dollar in 10 years.

The rest of the article basically blasted econ types as being snobby and stuck in their ways and this is the reason why they didn't know how or what to do in a "new" business environment.

[Donald Ian Rankin]

2. ...wait, what? You think making it easier for businesses to get loans is victimising them?

Seriously?

[Squinch]

4. Accepting a TISSUE from Bank of America strikes me as a risky proposition.

Looser lending policies are not victimizing. But BOA has a bad history.

[JI7]

3. i'm not seeing what you are seeing here

am i missing something ?

[dixiegrrrrl]

5. Appreciate your asking....here is where my thinking went

Banks now "monetize" all loans...car loans, student loans, etc. Anything they loan they then turn into "products" to sell, usually into
some form of securities.
The housing loans which were used were often--not always, but often-- given to people under very loose credit standards, and eventually resulted in a bubble, which popped.
banks did not care as long as they could, and did, pass the loans along in the form of securities which were sold to pension funds, among other buyers.

Come the housing bust, all sorts of problem were discovered over the subsequent years.

So the banks turned to student loans and car loans, and have been secularizing them. Lots of stories in the news about car dealers who sell the loan before the ink is dry, to the banks who turn the loans into securities and sell them off, ahead of the car buyers who find they cannot keep up the loan payments as the economy gets worse and worse.

Ok..so ..now the banks are going after small business loans, thanks to " loosened credit standards "

It is those "loosened credit standards" which concern me..same game, different target.
And in a still very bad economy.
By the same banks which have not cleaned up their act since they crashed the economy in 2008.