Fed lifts restrictions on Wells Fargo

New York CNN Business — The Federal Reserve is temporarily letting Wells Fargo out of the penalty box, freeing the troubled bank to aggressively lend to small businesses struggling to survive the coronavirus crisis. The Fed said in a statement Wednesday it is easing the growth restrictions, first imposed on Wells Fargo in 2018, because of the “extraordinary disruptions from the coronavirus.” The change will allow Wells Fargo to participate only in emergency programs designed to help companies harmed by the health crisis, including a forgivable loan program for small businesses. This will add much needed capacity to the government’s small business lending efforts.” former FDIC chair Sheila Bair Wells Fargo said customers will be able to begin the process Wednesday afternoon through the bank’s PPP website. “The Fed, to its credit, recognizes that Wells Fargo was ideally situated to provide that relief to Main Street, but for the cap.” This doesn’t end Wells Fargo’s troubles Wells Fargo has been mired in scandal since September 2016, when the bank admitted its workers created millions of fake bank and credit card accounts to meet wildly unrealistic sales goals. “The consent order exists because of deficiencies that have existed at Wells Fargo for years.” Scharf said that although fixing these problems is Wells Fargo’s “top priority,” he acknowledged “we still have much to do.” Although Wells Fargo won’t profit directly from the Fed moves, the developments are a win for a bank hurting from years of scandal and a public relations nightmare.