(Updates with comment on regulation in fourth paragraph.)
June 8 (Bloomberg) -- Wells Fargo & Co.’s finance chief told analysts the U.S. economy is growing at a “slow but steady” pace even as new regulations put a drag on business.
The June 3 jobless report, in which the unemployment rate climbed to 9.1 percent for May, was just “one week of data,” Chief Financial Officer Timothy Sloan said today during a conference sponsored by Deutsche Bank AG. Commercial and wholesale lending have picked up, and Sloan is more optimistic about their outlook than a month ago, he said.
Bank executives have said the economy has been slowed by new rules and higher capital requirements designed to prevent a repeat of the 2008 financial crisis. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon publicly asked Federal Reserve Chairman Ben S. Bernanke yesterday whether overzealous regulation is holding back growth.
“It feels like we’re going a little bit too far,” Sloan said. Wells Fargo’s financial strength and liquidity mean the bank shouldn’t need to be subjected to the strictest capital requirements, he said.
Wells Fargo is the biggest U.S. home lender and has the largest branch network. The San Francisco-based bank ranks fourth by assets, and it’s also among lenders targeted by state attorneys general in their probe of foreclosure practices by mortgage servicers. The company ranks second behind Charlotte, North Carolina-based Bank of America Corp. in the business of billing and collections.
Sloan said his company is making progress in negotiations to settle the probe, which is examining whether lenders took improper legal shortcuts, including the use of false documents, to seize homes from overdue borrowers. One sticking point is a demand that banks forgive principal on loans they service, even if they don’t own them, he said.
“We’ll never agree to that,” Sloan said. “That makes absolutely no sense.”
Wells Fargo advanced 11 cents to $25.88 at 10:08 a.m. in New York Stock Exchange composite trading. The company has slipped about 16 percent this year.
--Editors: Dan Kraut, William Ahearn
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