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Started By
Message
Wells Fargo stops making PPP loans because it hit $10 billion - why you ask?
Posted on 4/6/20 at 8:10 am
Posted on 4/6/20 at 8:10 am
Because of their shenanigans opening fake accounts for people for bonuses and other hinky shite
Just wanted to get the real news out there before some dumbass media member blames this on Trump or the SBA.
In other news...a single bank has already made $10 billion in PPP loans since the program started 3 days ago.
quote:
Wells Fargo said Sunday evening that it has exhausted its $10 billion capacity for lending under the SBA’s Paycheck Protection Program as the bank operates under a regulatory asset cap.
In other words, amid the pandemic-induced downturn that has some talking of an impending economic depression, one of the nation’s largest lenders will largely be kept on the sidelines.
“Today, the company continues to operate in compliance with an asset cap imposed by its regulator due to actions of past leadership,” Wells Fargo CEO Charlie Scharf said in a statement Sunday. “While we are actively working to create balance sheet capacity to lend, we are limited in our ongoing ability to use our strong capital and liquidity position to extend additional credit.
Just wanted to get the real news out there before some dumbass media member blames this on Trump or the SBA.
In other news...a single bank has already made $10 billion in PPP loans since the program started 3 days ago.
10
Posted on 4/6/20 at 8:18 am to udtiger
I would be curious to know if that is $10Bn in applications, or $10Bn in actual fundings. The SBA was still tweaking rules late Saturday night.
Posted on 4/6/20 at 8:23 am to udtiger
If they already lent $10B, they ain't on the sidelines
Posted on 4/6/20 at 8:25 am to udtiger
It is stupid to have an asset cap on Wells Fargo because of the fake checking account scandal. That so called scandal did little to hurt anybody.
Now here we sit with one of the nation's largest business lending institutions with no lending capacity because of temporary lending cap.
Wells has the balance sheet to fund over $384 billion in loans---more than the entire PPP funded program.
The need to fine Wells and remove the cap---for the sake of the borrowing businesses that depend on them.
Now here we sit with one of the nation's largest business lending institutions with no lending capacity because of temporary lending cap.
Wells has the balance sheet to fund over $384 billion in loans---more than the entire PPP funded program.
The need to fine Wells and remove the cap---for the sake of the borrowing businesses that depend on them.
Posted on 4/6/20 at 8:26 am to catfish 62
The banks can fund very quickly under the program. All they need is the SBA loan number and the SBA is turning them around online.
Posted on 4/6/20 at 8:26 am to udtiger
My bank had an announcement on their site, that said that they were no longer accepting new applications for the PPP loan, due to overwhelming response........That was very early on Saturday morning!
Luckily, I got my app submitted about 30 minutes after they released it on Friday afternoon.
Luckily, I got my app submitted about 30 minutes after they released it on Friday afternoon.
Posted on 4/6/20 at 8:26 am to I B Freeman
quote:
The need to fine Wells and remove the cap---for the sake of the borrowing businesses that depend on them.
But is it Treasury or is it Cali that has capped them?
Posted on 4/6/20 at 8:27 am to I B Freeman
quote:
It is stupid to have an asset cap on Wells Fargo because of the fake checking account scandal. That so called scandal did little to hurt anybody.
Yeah, I mean, what's a little identity theft among friend err I mean clients.
Posted on 4/6/20 at 8:37 am to udtiger
The Federal Reserve Bank and they have already paid big fines and they face several large lawsuits.
They have been punished. They fired over 5000 people over the scandal. CEO was replaced.
They have been punished. They fired over 5000 people over the scandal. CEO was replaced.
Posted on 4/6/20 at 8:41 am to catfish 62
quote:
I would be curious to know if that is $10Bn in applications, or $10Bn in actual fundings.
Applications.
Posted on 4/6/20 at 9:21 am to I B Freeman
So here's my question, it's a bit of inside baseball but I think it's important.
The 349 billion... what exactly does that apply to?
1) Are the banks funding these loans and then Treasury will pay the loans off when they are forgiven (to the extend they are forgiven)?
2) Is treasury giving 349 billion to the banks in cash, today, to lend, so the banks don't have to lend their own money?
If the SBA is limiting lending capacity per bank, that tells me that the system has enough capacity to handle this even with the cap on WF.
Also, keep in mind that this program is likely to end up with a ton of fraud... and considering WF was busted for fraud... I can understand holding them down a bit.
The 349 billion... what exactly does that apply to?
1) Are the banks funding these loans and then Treasury will pay the loans off when they are forgiven (to the extend they are forgiven)?
2) Is treasury giving 349 billion to the banks in cash, today, to lend, so the banks don't have to lend their own money?
If the SBA is limiting lending capacity per bank, that tells me that the system has enough capacity to handle this even with the cap on WF.
Also, keep in mind that this program is likely to end up with a ton of fraud... and considering WF was busted for fraud... I can understand holding them down a bit.
Posted on 4/6/20 at 9:31 am to udtiger
quote:
Because of their shenanigans opening fake accounts for people for bonuses and other hinky shite
My wife's business applied for it, and I told her that I guarantee that people are fraudulently applying for these loans.
Like those who applied for money in the BP oil spill.
Posted on 4/6/20 at 9:32 am to udtiger
Leaves more for the rest of us.
Posted on 4/6/20 at 9:34 am to I B Freeman
quote:
Wells has the balance sheet to fund over $384 billion in loans---more than the entire PPP funded program.
The other banks of the big 4 plus all the large Regional banks have plenty of capacity. This is not a big deal.
Posted on 4/6/20 at 9:36 am to I B Freeman
quote:Da fuq?
It is stupid to have an asset cap on Wells Fargo because of the fake checking account scandal. That so called scandal did little to hurt anybody.
Posted on 4/6/20 at 9:38 am to udtiger
quote:
Wells Fargo stops making PPP loans because it hit $10 billion - why you ask?
Because of their shenanigans opening fake accounts for people for bonuses and other hinky shite
Posted on 4/6/20 at 9:40 am to LSUFanHouston
quote:
1) Are the banks funding these loans and then Treasury will pay the loans off when they are forgiven (to the extend they are forgiven)?
Banks are definitely funding these loans. They process the application and validate the info provided. It’s a limited and quick underwriting but the banks do have exposure to fraud losses here and do need to spend some time doing their best to validate the payroll info businesses provide.
The bank I work for had 25 people in our SBA lending group. It’s now been temporarily increased to 350 to try and process these as quick as possible.
Posted on 4/6/20 at 10:13 am to LSUFanHouston
) Is treasury giving 349 billion to the banks in cash, today, to lend, so the banks don't have to lend their own money?
No, this is Bank capital with the idea that the gov/sba will step in and pay us off on the back end. That's why the process is taking some time. No bank wants to toss around their capital without knowing for damn sure that the government is guaranteeing. as you can imagine, the demand is incredible. every app has to go through the SBA in order to get a loan number which means that your gaurantee is essentially in place.
No, this is Bank capital with the idea that the gov/sba will step in and pay us off on the back end. That's why the process is taking some time. No bank wants to toss around their capital without knowing for damn sure that the government is guaranteeing. as you can imagine, the demand is incredible. every app has to go through the SBA in order to get a loan number which means that your gaurantee is essentially in place.
Posted on 4/6/20 at 10:15 am to LSUFanHouston
The banks are funding them and will only be reimbursed the amount of forgiveness the borrower qualifies for. They will pay that as soon as the borrower qualifies for forgiveness and proves performance.
The SBA will reimburse the banks if the loans go bad but since the loans are two years that could some time.
Thus the balance sheet issues for WF and others.
The SBA is not limiting the banks—the Federal Reserve has capital requirements. The SBA has only $340 billion authorized in loan guarantees. If the capital punishments on WF were lifted and they had traditional capital requirements they could do it all.
It is foolish to limit a bank with such a strong balance sheet in these times of limited credit.
The SBA will reimburse the banks if the loans go bad but since the loans are two years that could some time.
Thus the balance sheet issues for WF and others.
The SBA is not limiting the banks—the Federal Reserve has capital requirements. The SBA has only $340 billion authorized in loan guarantees. If the capital punishments on WF were lifted and they had traditional capital requirements they could do it all.
It is foolish to limit a bank with such a strong balance sheet in these times of limited credit.
This post was edited on 4/6/20 at 10:20 am
Posted on 4/6/20 at 10:57 am to I B Freeman
quote:
The SBA is not limiting the banks
False - SBA is allocating capacity to banks so everyone knows what they have to work with.
quote:
If the capital punishments on WF were lifted and they had traditional capital requirements they could do it all.
It is foolish to limit a bank with such a strong balance sheet in these times of limited credit.
There is plenty enough capacity in the system to handle these.
How many shares of WF do you own?
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