Fed eases limit on Wells Fargo to make more small biz loans

[Omaha Steve]

Source: AP

By KEN SWEET

NEW YORK (AP) —

The Federal Reserve is lifting its lending restrictions on Wells Fargo after some of the bank’s thousands of small business customers were shut out of a program that’s supposed to throw them a financial lifeline.

The Fed’s action will allow Wells to make more loans under the $349 billion Paycheck Protection Program that launched last week as well as the Fed’s own upcoming small business lending program.

The PPP is aimed at providing loans to small businesses shuttered by the coronavirus pandemic in order for them to keep paying employees and cover some overhead expenses. Wells, one of the largest small business lenders in the country, quickly hit its Fed-imposed $10 billion threshold on loans over the weekend.

Wells customers who tried to apply for a loan this week were told the bank was unable to accept more applications, leaving them to scramble to find another bank that would lend to them under the program. But many banks haven’t been accepting applications from new customers.



FILE - In this April 3 2020 file photo, customers, some wearing face masks, line up outside a Wells Fargo branch in the Atwater Village neighborhood of Los Angeles during the coronavirus outbreak. The Federal Reserve is lifting its lending restrictions on Wells Fargo, Wednesday, April 8, to allow it to make more loans that fall under the $349 billion Paycheck Protection Program and the Fed’s upcoming own small business lending program. The Fed has had Wells under a tight leash due to the bank’s prior scandalous behavior, including the opening of millions of fake accounts (AP Photo/Damian Dovarganes, File)


Read more: https://apnews.com/b88245e1ec9f7efd67279d79152248d3

[Newest Reality]

1. Oh, great.

What small business wants to go through be involuntarily signed up to dozens other accounts and services they didn't authorize?

Is this the way they are going to stimulate things? Well, if you want LOTS of activity, I guess Wells Fargo can whip that up fast.

[Fullduplexxx]

2. Jezuz what dope would risk their credit with w.f.

[lagomorph777]

3. Risking their businesses. Scary shit.

[Wellstone ruled]

4. Please do not forget,

Foothill Financial,which is their Sub Prime Lender,will most likely be the SBA go to for this bunch of Crooks. All about the "Vic",my friends.

[Loge23]

5. Leaving it the banks

Many, I mean many, small businesses are in for a very disappointing surprise when they show up looking for these SBA loans.
First thing to know: the SBA does not make loans, they only guarantee them to the banks in the best case scenario. They leave the banks to qualify the loan-making, in which case many small businesses will not qualify - whether or not they are customers of the institution making the loans.
In the last big small business emergency loan program that I was involved (as an Advisor with the SBDC), most of the small businesses where I was based were unable to get past the application process. Some gave up during the application process.
A few did prevail - I'd say about <10% - and did receive a loan. In a few cases, the loan amount was adjusted downward by the lender.
Now I know that these loans are not only guaranteed, but are forgivable as well. But the process that the banks rely on is still gumming up the process. That's our system folks, like it or not. The banks will always be looking their pound of flesh out of the deal.

[turbinetree]

6. Rep. Katie Porter..................