To the Editor:
Recently, right-wing pundits, particularly on Fox News, have said that even if Donald Trump is guilty of fraud, who cares since no one was hurt. That is not true. If you consider the ramifications of his and his company’s actions, many people were hurt. Let me explain by giving you this example.
Banks have only a certain amount of funds that are available to lend. Pretend that Bank A has $3 million in its pot. The Trump Organization applies for a loan, falsifying its financial records to get approval for $2 million at a preferred (lower) rate. That leaves only $1 million in the pot for all the small businesses that are applying for loans and those businesses will be paying a higher rate. If the Trump Organization had not falsified its records, it might have only qualified for $1 million, leaving $2 million in the pot for everyone else. Additionally, the Trump Organization claims that all its loans were paid back. This is misleading. Many of its loans are either restructured or are moved to another bank. Both actions make it seem like the original loan is paid off and both actions again affect smaller borrowers.
Banks anticipate a certain amount of income from their loans. If huge amounts of money are lent at a lower rate than anticipated, then the bank’s bottom line is affected and its income is less than predicted. The bank then has to make up the lost income in other ways. Think of things like a higher charge for overdrafts, suddenly being charged for using bill pay, fees for using your ATM card, higher fees for merchant services. These all affect small businesses and individuals like you and me. So don’t say that no one was hurt by bank and insurance fraud. We all are.