Wells Fargo Bankers Answer Criticism of Lending Practices

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Wells Fargo Bankers Answer Criticism of Lending Practices
This is an article review of ‘Wells Fargo Banker Answers Criticism of Lending Practices` that was written by Robb MandelBaum and published on 25 may 2011.
This article is about the wells Fargo bank that deals with lending money to small businesses that are their market segment. It is developed through an interview where the two leaders of the leading moneylenders of the small business narrate on how they have changed the face of this financial institution and how they have improved loan accessibility. This is contrary to what has been termed as darkest day of the economic crisis when there was little to say about the national biggest banks especially the small business owners. The main reason is that these big banks bailout money making it difficult even for longstanding banking relationships to access the loans.
According to the interview, Mr. Case and Mr. Bernstein talked about money lending especially during economic crisis. This came amidst criticisms that had constantly raised towards Wells Fargo bank among other banks in the money lending practices. One of the problems that they cited is the approval of loans. This is especially during the time when the businesses have undergone the recession period with great deal of debt. Mr. Bernstein says, "a lot of businesses entered the recession with a great deal of debt. There was a 33 percent increase in the small-business loan balances nationally, between 2005 and 2008. Now that had grown slowly for years, but all of a sudden banks really went hog wild in terms of loaning to small businesses." The other reason was falling of sales in most of the business. This has made most of small businesses maintain a negative cash flow thus making them draw down their reserves. Finally, he talks of the issue of incapability of most of the business to repay the loan. This makes them to be reluctant to offer loan or else take longer to approve loan to them.
According to Mr. Bernstein, he said that they have a different method...