Wells Fargo, the nation’s second-largest bank by assets, is proposing to take on the nation, including a $1 billion loan requirement, as part of a plan to make up for a recent downturn in lending, according to people familiar with the plan.
The proposal to take out the loan is a part of Wells Fargo’s effort to make itself more resilient in a financial crisis that has battered banks and retailers alike, the people said.
Wells Fargo Chief Executive Brian W. Shanks said last month that the bank expects to take more than $2 billion of loans out this year.
The bank has been seeking ways to reduce its reliance on loans from banks and credit unions that were under pressure during the recession.
The loan requirement is part of the bank’s efforts to reduce the reliance on mortgage-backed securities that have helped it avoid bankruptcy.
That’s because banks and other lenders are no longer required to make mortgage-financing guarantees.
Wells also is seeking to lower the cost of loans that it holds in trust, including those issued by its own mortgage insurance companies.
The company is also taking steps to make its loans less attractive to customers who qualify for lower interest rates.
The company is exploring several loan programs, including one that offers to lend a portion of its portfolio to small businesses with less than $10 million in assets.
The loan is expected to be approved by the Federal Housing Finance Agency this year, according the people, who spoke on condition of anonymity because the plans are private.