Banks have no obligation to lend someone money if they don't think they can repay. Loans aren't a privilege, or a right. The banks reserve the right to refuse anyone.
Perhaps we should have let these "too big to fail" banks indeed fail.
Banks don't simply serve individual, private interests. They also serve a public interest -- to oversimplify into a word: liquidity.
I suppose I should read into the details of the OP article. Nonetheless, saying that banks have "no obligation" is I think incorrect. Saying they shouldn't make loans under bad circumstances, I agree with.
P.S. Sorry if and as I've over-reacted. But I'm tired of banks on the one hand taking advantage of a very privileged position (including government support) while on the other claiming their sole purpose is to serve in the absolute whatever they define as their private interest.
I flew a bit off the handle in my comment. I should have read through the OP article. Perils of too much coffee and multi-tasking.
I'll leave my comment, instead of deleting it, since its already gained a reply.
What touched me off, is that, defined as "private" as they may be, as business institutions, banks are nonetheless very much social institutions. One of the fundaments of modern society.
And, as more people transition to self-employment, access to capital including for things such as home purchase, is going to be increasingly significant to society in terms of the numbers seeking such.
The idea that self-employment removes you from the ability to access such loans: That will be a significant concern that needs to be evaluated and addressed.