Fed says modifying Wells Fargo asset cap so bank can make more small business loans

WASHINGTON (Reuters) – The U.S. Federal Reserve said on Wednesday it would “temporarily and narrowly” modify the growth restriction on Wells Fargo & Co’s asset cap so the bank can make more loans under government assistance programs for small businesses hurt by the coronavirus disruption.

Wells Fargo, a major small business lender, said on Sunday it had hit a $10 billion cap on loan applications it is able to accept under a $350 billion small business payroll protection program passed by Congress last month due to constraints imposed by the asset cap.

The change will allow the bank to make additional loans under that program and the Fed’s forthcoming Main Street Lending Program, and will be in place as long as those facilities are active, the central bank said.

(Reporting by Michelle Price; Editing by Chizu Nomiyama)