Displaying items by tag: wells fargo

According to COVID Loan Tracker, big banks are not doing a good job getting money moving to those who have applied for PPP loans. In their latest update yesterday afternoon, with around 8,000 companies reporting around $3.5 bn of loans from all 50 states, the large majority are getting approved through small and regional banks. In fact, JP Morgan Chase seems to be the only bank getting any applications approved, as Wells Fargo and Bank of America are showing very few approvals on COVID Loan Tracker, with Citi showing none.

PLEASE HELP US HELP SMALL BUSINESS OWNERS BY FILLING OUT THE FORM

COVID Loan Tracker was started by small business owners Duncan and Rita MacDonald-Korth to help their fellow small business owners understand when PPP and EIDL advance money starts flowing. The site works by crowdsourcing knowledge on applications and loan disbursements. Our goal is to help the small business community and empower journalists with the data they need to keep the government accountable.

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Small and regional banks have been leading the charge in approvals all over the country. This is reportedly because many small and regional banks were already set up to process SBA loans as part of their normal course of business before the COVID-19 outbreak. This means they were already familiar and connected to the E-Tran system being used to process the loans by the SBA.

Please help us keep the data flowing!

(New York)

The epicenter of the financial crisis accompanying the Coronavirus pandemic has undoubtedly become the commercial real estate space. With so many physical businesses bringing in zero revenue, the huge suspension of cash payments is going to flow through to property owners and then to the lenders that financed those building purchases. Multiple parts of that value chain are going to targeted by markets, but Wells Fargo, in particular, looks exposed. The bank has almost 13% of mortgage market share (residential), around double the exposure of JPMorgan Chase and triple that of Bank of America.

FINSUM: The government’s stimulus package offers some good assistance to help support cash flow (via Ginnie Mae), which could soften the blow. But still, it is going to be a painful period.

(New York)

Yesterday’s relief rally has already turned sour. Earnings out of Amazon and Google greatly disappointed the market and shot the Nasdaq down as far as 3% in premarket trading. However, despite all the trouble, Wells Fargo says it is the best time to buy stocks since before Trump’s presidency. According to the head of the Wells Fargo Investment Institute, “We believe that this isn’t the end of the cycle or the bull market, and we favor deploying cash now—or even allocating incrementally over the coming days and weeks”, continuing “Current conditions have the potential to create some of the best entry points into equity markets since the November 2016 elections”. That said, Wells Fargo acknowledges that we are at the end of the “easy period” of low volatility and an accommodative Fed.

FINSUM: It is anybody’s guess as to whether this view is right, but we reluctantly tend to agree that stocks are probably going to recover from this bout of volatility sooner rather than later.

(Washington)

The scandal for Wells Fargo’s wealth management division is deepening. The bank has already experienced major reputational damage following its checking account scandal, and now the US Department of Justice is investigating the wealth management division’s alleged misconduct. The move is part of an extension of the investigation into the retail banking misconduct, and the FBI is reportedly holding interviews in the Phoenix area. Earlier this month the bank disclosed its own independent review of its wealth management unit included “whether there have been inappropriate referrals or recommendations, including with respect to rollovers for 401(k) plan participants, certain alternative investments, or referrals of brokerage customers to the company’s investment and fiduciary services business”.

FINSUM: This scandal looks like it is going to keep moving deeper and deeper. We wonder how much damage this might ultimately have on Wells Advisors’ own businesses. This seems like a situation where advisors might be seen by clients as guilty by association.

(San Francisco)

In what looks like a continuation of the recent meltdown of the Wells Fargo brand, a new scandal has come to light. The company is having several senior executives resign as a new Justice Department investigation is underway into bad practices in its wealth management unit. The accusations surround overcharging customers and inappropriate advice to wealth management clients.

FINSUM: Who knows how big this one might blow up? The scandal in its core banking business had not really affected the wealth management unit so far, but that may change.