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Bank of America Sees Demand Surge for Paycheck Protection Loans

Bank of America reports strong demand for loans under the Paycheck Protection Program.

Bank of America  (BAC)  said Monday it was seeing strong demand for emergency rescue loans as current applications already account for nearly 10% of the entire amount allocated by Congress.

The bank said that as of Monday morning it had received more than 178,000 applications seeking $32.9 billion under the Paycheck Protection Program. The bank's current figures are its applications and don't represent the sums the Small Business Administration has approved.

The $350 billion Paycheck Protection Program is a government-backed loan effort to help small businesses keep workers on the payroll. The money is part of the $2 trillion rescue package Congress passed last week in response to the coronavirus pandemic. 

Bank of America was the first major bank to announce its involvement in program on Friday. JPMorgan Chase  (JPM)  followed a short time later, saying customers could apply through its website.

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Bank of America faced criticism Friday for denying loan applications from certain people seeking to access the funds set aside by the program.

The bank ended up changing its position with CEO Brian Moynihan saying Friday that applicants no longer needed an existing lending relationship with the bank to access the funds.

Separately, Wells Fargo  (WFC) is pushing to lift restrictions the federal government imposed after a series of lending-abuse scandals, arguing that the rules are severely limiting the volume of loans it can disburse under the program. 

The San Francisco-based bank said on Sunday that it was being forced to cap lending under the federal government's $349 billion small business rescue program at a relatively modest $10 billion.

Bank of America shares were rising 5.4% to $21.12, while JPMorgan Chase climbed 6.1% to $89.16, and Wells Fargo was advancing 5.5% to $27.68.