Bulletin: Wells Fargo&Co. Receives Temporary Limited Relief From Asset Cap Restriction; Balance Sheet Size Remains A Challenge

NEW YORK (S&P Global Ratings) April 8, 2020--The Federal Reserve announced today that it is providing Wells Fargo&Co. (A-/Negative/A-2) with limited relief from the asset cap restriction that it imposed on the company in February 2018 due to compliance and operational issues ($1.95 trillion based on a two-quarter daily average). Specifically, to facilitate Wells' participation in the Paycheck Protection Program and the forthcoming Main Street Business Lending Program, which are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Fed has granted Wells temporary relief in regard to the asset cap, but only as it applies to asset growth arising from the programs within the CARES Act. We view this development somewhat positively because it

...NEW YORK (S&P Global Ratings) April 8, 2020--The Federal Reserve announced today that it is providing Wells Fargo & Co. (A-/Negative/A-2) with limited relief from the asset cap restriction that it imposed on the company in February 2018 due to compliance and operational issues ($1.95 trillion based on a two-quarter daily average). Specifically, to facilitate Wells' participation in the Paycheck Protection Program and the forthcoming Main Street Business Lending Program, which are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Fed has granted Wells temporary relief in regard to the asset cap, but only as it applies to asset growth arising from the programs within the CARES Act. We view this development somewhat positively because it will help Wells better serve its core borrowers that may seek financial support from these federally assisted loans, aiding these borrowers' creditworthiness. That said, we believe balance-sheet growth for Wells outside of the CARES...

Bulletin