Wells Fargo’s small business customers spent much of the week expressing their frustration with the bank after they were told that they might be better off going elsewhere for a Paycheck Protection Program loan.
Historic City News learned that the bank exhausted its $10 billion lending capacity in less than two-days after it began taking “expressions of interest” last Monday, according to published reports. Wells Fargo, the third largest financial institution in Northeast Florida, discouraged applicants for loans guaranteed by the Small Business Association as it hit those lending caps.
“We know that these are tough times, and we’re committed to helping you get through this,” Wells Fargo CEO Charlie Scharf said in a published statement. “Wells Fargo is working as quickly as possible to assist small business customers with the Paycheck Protection Program.”
That “commitment” was of little comfort to small business customers who often needed the money “yesterday” to meet payroll, rent and other expenses. The SBA program is designed to be a capital lifeline to that market.
Wells Fargo is still trying to recover from a series of scandals that first came to light in 2016. The regulatory asset cap that the Federal Reserve placed on the bank was designed as a disciplinary action. However, the cap limit on the availability of credit from Wells Fargo has effectively become a punishment for the bank’s small businesses who opted to remain loyal customers of the bank.
By mid-week the Fed eased Wells Fargo’s asset cap so that it could do more lending under the Small Business Association relief program. The bank resumed taking applications from its small business customers. But, by Friday the bank was again urging its customers to consider going elsewhere for loans under the Paycheck Protection Program.
Scharf was brought on board to rebuild the bank’s leadership and culture. The bank’s frustrated small business customers are among those waiting to see the impact of the bank’s new leadership and direction. Their frustration is not likely to subside while the bank’s loan window is closed.