Banking Stocks & ETFs Are Down Today As Customers Swarm For Loans

In the wake of more than 1 million worldwide cases of coronavirus, and news that stimulus checks may be delayed, customers are swarming bank websites to apply for loans, as banks stocks are in the red Friday.

The IRS intends to send out $1,200 coronavirus stimulus payments starting on April 9, The Washington Post reported Friday, citing an agency plan, but since some Americans have not utilized direct deposit for past tax refunds, they could be in for as long as a five-month wait to cash their check, according to an internal document obtained by The Post.

According to the payment schedule, electronic payments could leave the IRS next Thursday, with deposits being made available by April 14 at the latest, The Post reported.

“If we know where to put the money, we’re going to press the button and put it there next week,” an anonymous IRS official told the publication.

While this could be good news for many Americans, people are still stampeding for loans, with Bank of America stating that about 50% through its first day administering a small business relief program, more than 58,000 customers applied for $6 billion in loans.

BofA was the first major lender to get its web portal operational for the Paycheck Protection Program, and it quickly received a deluge with requests.

“That is an astounding number of applications to take in such a short period of time and considering we just launched the site this morning at 8:45 a.m.,” a Bank of America manager told staff in an email.

The U.S. government has asked banks to disseminate at least $350 billion in loans to small businesses in coordination with the $2 trillion coronavirus stimulus bill signed last week. But banks and industry groups have scrambled to get online systems up and running until just hours before the deadline and without much governmental guidance.

“Having just received guidance outlining how to implement a $349 billion program literally hours before it starts, we would ask for everyone to be patient,” Richard Hunt, head of the Consumer Bankers Association, said late Thursday. He added that the organization’s members would “move heaven and earth to get a system in place and running to help America’s small businesses and the millions of men and women who work at them.

Bank stocks are down today with Bank of America off by 2.6% Friday and JP Morgan down by 4.41%. Bank ETFs were struggling as well Friday, with the Financial Select Sector SPDR ETF (XLF) down 2.3% and the Vanguard Financials Index Fund ETF Shares (VFH) off by 2.65%.

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