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Apr 8, 2020

Finance: The Fed is lifting Wells Fargo's asset cap so it can help lend to small business

Jeff Cox

The Federal Reserve is lifting the asset cap it has imposed on Wells Fargo so the bank can participate in the government’s small business lending program.
In a move that was expected, the central bank said Wells will have to return proceeds it gets from the Payment Protection Plan and a coming Main Street lending program either back to the Treasury Department or to a nonprofit.
The Fed had imposed the restrictions following the bank’s fake account scandal in which it created millions of accounts for customers without their knowledge. Associates were under sales pressure in a program that Wells Fargo has since abandoned.
Wells Fargo is the third-largest bank in the U.S. by assets, making its participation in the lending programs critical.
Since the intensification of the coronavirus crisis, the Fed has implemented a variety of programs aimed at helping markets function and getting money to businesses and consumers.
This move with Wells came “due to the extraordinary disruptions from the coronavirus” and “temporarily and narrowly modify the growth restriction on Wells Fargo so that it can provide additional support to small businesses.”

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