Wells Fargo (WFC) - Get Report 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 government's program to provide emergency aid to small businesses.
On Sunday the San Francisco banking major said it was being forced to cap lending under the federal government's $349 billion small business rescue program at a relatively modest $10 billion.
In a statement, the bank argued that the bottleneck is being caused by regulations the federal government slapped on Wells Fargo in 2018. These were prompted after the bank was found to have opened millions of accounts in customers' names without their authorization or knowledge, among other issues.
The bank contends it has rectified those issues, though it faces continuing scrutiny from Congress. That oversight led two board members to resign this year.
"Today, the bank continues to operate in compliance with an asset cap imposed by its regulator due to actions of past leadership," said Wells Fargo Chief Executive Charlie Scharf, who took over in September, in a statement.
Wells Fargo said it has capacity to make $384 billion in loans, but at the start of the year it had space for just $20 billion for additional growth under the Federal Reserve's restrictions. Those rules capped the bank's assets at $1.95 trillion.
By the time the federal Paycheck Protection Program passed last week, Wells Fargo had just $10 billion in additional growth under the cap.
Wells Fargo said it has likely reached the $10 billion mark under the wave of applications it received since the federal program went live on Friday.
The bank said it would focus on lending to nonprofits and small businesses with fewer than 50 employees.