Large financial institutions don’t have the same stake in the community as smaller banks; they aren’t putting up their own shareholder dollars when they lend to a small business. And they don’t have the same personal relationships with their borrowers, which can save a small business from their inevitable stumbles and mistakes. In these two cases, viable companies were shuttered and lives upended, and the owners claim it was entirely due to the decisions of their banks. It was a good lens through which to view the changing landscape of finance in America, and what we have lost amid rampant consolidation.

–David Dayen, executive editor

Big Banks Behaving Badly

One Tuesday night in July 2023, Ron Luessen got contacted by a late-shift worker on the support team for Elcon, a construction firm in the Pacific Northwest. Luessen, an equipment manager, was off the clock, but he was the main point of contact, and the worker was puzzled. “We’re supposed to be working tonight, and this place is closed,” Luessen recalled the message. “What do you want us to do?”

There wasn’t any reason for the building to be closed. Elcon was steadily busy, recently picking up business in Billings, Montana, beyond its base of operations in Seattle. The company had even just updated the kitchens.

But the next day, around 120 Elcon employees got the official word: Don’t come in. After 42 years building bridges, highways, rail lines, airports, and basic infrastructure Americans use every day, Elcon was history.

Several months later, Abilene Eplin, a single mother of three, was building a company that set up electronic payment terminals for businesses. She was able to sign a major contract with an automotive dealership group, projecting revenue of $1.1 million per year with the potential to scale past $2 million. It was the fulfillment of a year of toil.

Yet one day, she went to withdraw funds from the company bank account, and the transaction was blocked. Someone else had claimed that they were the sole owner of the business, preventing Eplin from accessing her money. Eplin provided copious evidence that she in fact owned the business, but 19 months later, she has been unable to pry one cent out of the hijacked account.

The common thread in these two stories—one company’s demise after decades of success, and another snuffed out right at its incipiency—is the role of the large, impersonal institutions that served as their bankers. KeyBank, a Cleveland-based regional lender with $185 billion in assets under management, decided to call in Elcon’s loans, instantly vaporizing the company and destroying its value. Wells Fargo, America’s fourth-largest bank by asset size, froze Eplin’s business account and has declined to release the funds, extinguishing her dream of owning her own company.

Among the many reasons given for today’s sour economic mood, we don’t talk much about small businesses with enduring financial needs that have been forced into shotgun weddings with soulless institutions that are disinterested in their futures. “One of the reasons money is channeled through banks, they’re supposed to be on the ground, they’re supposed to know clients,” said Graham Steele, former assistant secretary for financial institutions in Joe Biden’s Treasury Department. “The larger an institution gets, the less they care about small businesses.”