Federal and state authorities have probed Wells Fargo over its handling of Paycheck Protection Program (PPP) loans, according to a regulatory filing from the bank.
In its quarterly report filed to the Securities and Exchange Commission, Wells Fargo said it had received “formal and informal inquiries from federal and state governmental agencies regarding its offering of PPP loans”.
It did not specify which states or agencies were involved and did not provide any further information as to the nature of the inquiries.
The filing also stated that Wells Fargo faced class action lawsuits in Texas, California and Colorado seeking “damages and injunctive relief” related to the bank’s PPP loans.
Several news reports in the past few months have claimed that the US’s biggest banks have put larger customers first when processing PPP claims, despite promises of working on a ‘first come, first serve’ basis.
JP Morgan Chase, US Bank and Bank of America are also being sued in relation to their handling of the PPP loans, according to a Bloomberg report from April 20.
A survey of 300 small business owners – conducted by payroll company Paychex – indicated that larger companies were more likely to have received their PPP loans as of April 27.
The survey, conducted between April 24 and April 27, found that 29% of companies with 50-500 employees had received payments, while 11% of firms with 10-49 staff had received their loans.
Just 8% of companies with 2-9 staff had received their PPP loans, Paychex reported.
More than half of companies that have applied for PPP loans were still waiting for funding or approval as of the end of April, Paychex’s research found.
Of those polled, 45% said they were still waiting for approval while 17% said they had been approved for a PPP loan but had not received payment.
Just 15% had received their PPP funding, and 7% said they had been rejected for a loan.
In the past few days, banks of all sizes have published their latest PPP lending data:
- Bank of America has received approval for 265,500 loans to small businesses worth $24.9 billion, it announced on Monday.
- PNC has registered more than 70,500 PPP loan requests with the Small Business Administration (SBA) totaling $14 billion. In a statement, the bank said it had taken “special care to ensure that non-profits and businesses operating in low- or moderate-income geographies were not left behind”.
- IBERIABANK said this week that it had secured more than $2 billion in loans, having processed 15,000 applications. Of those, “99.8% of fully qualified loans have received SBA allocation of funds”, the bank said.
- Atlantic Union Bank has received approval for more than 10,000 loans totaling over $1.7 billion.
- ServisFirst Bank said it had processed over 3,700 PPP loans worth more than $1 billion.
- As of May 1, Popular Bank said it had processed $1.2 billion worth of loans for 16,397 small and medium-sized businesses employing more than 235,000 people in mainland US, Puerto Rico and the Virgin Islands.
- Fulton Bank said it had issued almost $2 billion in PPP loans to more than 9,400 small businesses.
- New York-based Orange Bank & Trust Company processed 700 small business loans worth more than $100 million, it announced this week.
- BNY Mellon Enters Digital Assets Arena as Interest Grows
- Fed’s Quarles says stress testing innovations helped steer banks through Covid-19 crisis
- Wells Fargo sells $600bn fund arm to private equity firms
- PPP Delivers $140B in 2021 as Biden Prioritizes ‘Mom and Pop’ Businesses
- First National Strikes Merger Agreement with The Bank of Fincastle