Wells Fargo has expanded its small business lending programme after the Federal Reserve lifted restrictions placed on it in 2018.
US regulators have restricted the bank’s activities in response to the fake accounts scandal, which had limited its capacity to lend to small businesses through the Paycheck Protection Program (PPP).
Following the Federal Reserve’s announcement last week, Wells Fargo said it would be accepting loan applications from small companies that comply with the Small Business Administration’s guidelines for the emergency lending program.
It had initially focused its lending on non-profits and those with fewer than 50 employees, capping lending at $10 billion for its share of the program.
“Wells Fargo appreciates the targeted action of the Federal Reserve to support the needs of small businesses through PPP and looks forward to expanding relief to many more small businesses and non-profits,” said CEO Charlie Scharf.
“In the first two days alone, we received more than 170,000 indications of interest from our customers, and know there is much more need.”
The Federal Reserve’s concession to Wells Fargo to allow it to lend more under PPP was a temporary measure, the regulator said in its announcement. The cap placed on Wells Fargo restricted the growth of its balance sheet, but will be “temporarily and narrowly” modified to aid the implementation of PPP.
Scharf emphasised that the action “does not – and should not – in any way relieve us of our obligations under the consent order”.
“I have said consistently since arriving at Wells Fargo that management has the responsibility to do the work necessary under the consent order,” he continued. “The consent order exists because of deficiencies that have existed at Wells Fargo for years. The work required under the consent order is clear, has been outstanding for too long, and is a prerequisite for consideration of the asset cap being lifted.
“While work on our consent orders is our top priority and we are devoting all necessary resources, we still have much to do. Until our work is completed to the Federal Reserve’s satisfaction, we will continue to actively make decisions on how to allocate our balance sheet to support the needs of our customers under the existing asset cap.”
Other banks of all sizes continue to introduce measures and make donations in response to the COVID-19 coronavirus pandemic.
BNP Paribas is to donate more than $55 million globally, including the US through BNP Paribas USA and its affiliate, Bank of the West.
The banks are making donations to hospitals in Los Angeles, New York City, San Francisco, and Seattle, while also funding protective equipment, a matching program for employee donations, and “additional support” for existing charitable partners.
BNP Paribas has also made “significant donations” throughout Argentina, Brazil, Canada, Colombia, Mexico, and Peru.
New Jersey-based Valley Bank is donating $200,000 to food banks throughout New York, New Jersey, Florida and Alabama, providing roughly two million meals.
It has also introduced a new “community recovery” certificate of deposit. Valley will donate more than 40% of the interest customers receive from the deposit account to local businesses through grants. The bank said it aimed to “contribute up to $2.5 million to those most affected by COVID-19”.
BNY Mellon has also rolled out a program of philanthropic support for communities, non-profits and hospitals.
It has made donations to the Center for Disease Control, the International Medical Corps, and Save the Children as well as to New York hospitals. The bank has also funded protective equipment, medical equipment, meals and other supplies to front-line workers.