Wells Fargo & Co (WFC.N) will stop providing loans to a majority of its independent auto dealer customers due to the economic challenges brought on by the COVID-19 pandemic, a spokeswoman said on Tuesday.
“We are doing everything we can to help customers weather the economic impacts of this health crisis ... we also have an obligation to review our business practices in light of the economic uncertainty presented by COVID-19,” the spokeswoman said in an email.
Wells Fargo has let the majority of its independent dealership customers know that it will suspend accepting loan applications, the spokeswoman said, adding that the bank will continue doing business with customers with whom it has “deep, long-standing relationships”.
CNBC reported here earlier on Tuesday the lender, who is worried about defaults, had informed hundreds of dealerships last month that it would drop them as customers.
The bank in April said it has set aside nearly $4 billion to cover expected loan losses due to the coronavirus outbreak.
Wells Fargo, the largest U.S. mortgage lender, is already offering here fewer home loan products during the economic downturn.
Scandal-plagued Wells Fargo has an unprecedented growth restriction on its balance sheet, which has limited its ability to make loans to help customers through the crisis.
The U.S. Federal Reserve has “temporarily and narrowly” modified the growth restriction on the lender’s balance sheet.