REPORT: Wells Fargo reported giving only one large PPP loan to a Black-owned business
Editors note (3:45 PM EST 07/24/2020): Wells Fargo takes issue with the report from Salon and Accoutanble in terms of missing the big picture and more importantly with methodology. Wells Fargo claims the data is wrong as the bank did not collect any racial data regarding the SBA program. See the company’s response to ValueWalk right here.
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Wells Fargo Handed Only One PPP Loan To A Black-Owned Business
WASHINGTON, D.C. – According to new reporting by Salon, of the more than 12,000 SBA Paycheck Protection Program (PPP) loans that Wells Fargo handled valued at $150,000 or higher, the bank reported distributing only one PPP loan to a Black-owned business. Additionally, unlike other lenders, Wells Fargo neglected to disclose any job retention data for over 8,000 of these loans and reported ZERO jobs saved for the remainder of the 12,000+ loans it made. The other 4 biggest U.S. banks only neglected to report jobs data on only about 290 of the more than 78,000 PPP loans they handled.
"Trump PPP failed to support small businesses in communities of color who are disproportionately impacted by this crisis, while wealthy publicly traded companies got the red-carpet treatment," said Kyle Herrig, president of Accountable.US, the government watchdog behind www.TrumpBailouts.org. "The rejection of transparency and accountability sent a clear message to banks that they were free to ignore Black, Latinx or Asian small business owners in need without consequence – and that's exactly what they did. Congress needs to replace PPP with a new program that ensures resources make it to underserved communities across the country."
Key Points From Salon:
- The Trump administration's reliance on big banks to distribute small business aid under the Paycheck Protection Program and a lack of transparency requirements have resulted in many Black-owned businesses being shut out of the program. One bank, Wells Fargo, reported distributing only one PPP loan larger than $150,000 to a Black-owned business out of the more than 12,000 it gave out.
- Big banks face multiple class-action lawsuits alleging they prioritized existing corporate clients over needy small businesses. The economic shock of the coronavirus and the lack of relief has left Black-owned businesses without a safety net, and as many as half may not survive the pandemic. Part of the reason that so many Black-owned businesses were excluded is a lack of government oversight. The Treasury Department and Small Business Administration did not require applicants or banks to report demographic information — or even how many jobs the loans would save.