JP Morgan feasting on CIT’s small biz business
The woes of commercial lender CIT, on the edge of bankruptcy, are not great for the bank’s many small business customers. But, apparently, they’re very very good for J. P. Morgan Chase, according to CFOZone.com.
The fact is, Morgan appears only too happy to fill the lending void created by CIT’s struggles. In recent months, the banking giant has reportedly been poaching some of CIT’s customers. Indeed, under commercial banking boss Todd Maclin, J.P. Morgan appears to be dramatically ramping up its lending to small- and medium-sized companies.
According to CFOZone, the commercial banking unit lent $15 billion to 21,000 small businesses in the second quarter as loans or lines of credit, a 50% increase from the previous quarter. Also, Morgan’s 2008 purchase of Washington Mutual should help the bank in the small business area, because WaMu has always done a lot of lending to small guys.
It shouldn’t come as too much of a surprise that JP Morgan, which along with Goldman Sachs, is emerging from the economic crisis as a victor, is moving in on CIT’s territory. Whether that’s ultimately a helpful development for small businesses is another matter. On the one hand, it means an uptick in small-business lending, which is desperately needed. On the other, the more competition the better; that’s the general rule, isn’t it? So, the ever-decreasing number of potential lenders to small business is troubling, and that includes JP Morgan’s new focus on CIT customers.
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Yeah, Wamu was a descent bank and when Chase took them over they screwed over a ton of people who were in good standing with Wamu. I am sure they found some legal loophole that allowed them to not only drop customers that they thought for some unknown reason were unfit for their “great company”, but to then up the interest rate for those dumb enough to stay with them. I looked for more Chase comments and stories but couldn’t find anything here. Have the hundreds and hundreds of complaints about what they have done gone unheard. Thanks for listening. Brett