(AP) - The "fiscal cliff" has been blamed for hurting a lot of businesses. But it also had a surprising result for one bank- it helped boost lending.
Wells Fargo said Friday that the fiscal cliff debate, when Republicans and Democrats fought over the budget ahead of a Dec. 31 deadline, boosted commercial loans late in the fourth quarter. Customers were anxious to book gains before higher taxes kicked in.
That doesn't mean Wells Fargo was thrilled about the fiscal cliff. CEO John Stumpf called for companies and the government to work together on a long-term budget compromise, so that individuals and small businesses wouldn't be paralyzed by the ambiguity.
"Uncertainty is the enemy of business and we simply cannot afford that today," Stumpf said in a call with analysts. "We know our customers, especially in the small and middle market segments, need certainty and clarity. They have cash and the desire to grow."
Later, in an interview with The Associated Press, chief financial officer Tim Sloan echoed those sentiments, then explained the jump in loans.
WELLS FARGO CFO TIM SLOAN: "Some of our customers were reacting to the change in tax policy by either selling their companies to take their capital gain in the fourth quarter, or by taking dividends out of their companies. This idea that somehow investors, consumers, (and) owners of businesses don't react to tax policy is kind of silly because they did. ... Everybody is glad we didn't have a disaster related to the fiscal cliff, but (they're) generally frustrated that we're going to have to go through the Washington negotiations again. We're hopeful that (lawmakers) can get together and start to deal with a big problem we have, which is a spending problem in our country."
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