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Wells Fargo Senior EVP & CEO of Consumer & Small Business Mary Mack joins Yahoo Finance to offer advice for small business owners and analyze 2021 consumer trends.
MARY MACK: No, we're starting to see the same things that we're all starting to see as consumers. There's more optimism amongst the small business community. They've surprised all of us in their resiliency, their flexibility. We look at studies that would suggest that 75% of small businesses have had to figure out a different way to operate. And they're doing that. So we're encouraged, but there's still a long road ahead. There's a lot of resiliency work that we all need to do.
SEANA SMITH: And speaking of that long road ahead, we know the government's efforts to help small businesses-- we've seen multiple rounds of PPP-- the latest round, that deadline was extended here to the end of May. Is the government, in your view, doing enough to help small businesses? Or is more help needed?
MARY MACK: Well, we've been encouraged by the extensions, because that has given access to more businesses. We're seeing that. We're seeing a number of businesses coming in for a second round loan. But we're also seeing a number of businesses that are accessing PPP for the first time. And that's encouraging.
But we know-- and the government made some changes to ensure access to underserved communities, to smaller businesses-- we saw that and actually executed some outreach to about 550,000 of our small businesses in low to moderate income and historically underserved communities. And what we saw was a number of them were just able to access for the first time the PPP dollars. And again, we were encouraged by the, I don't know, close to 20,000 that came in as a result of that outreach.
SEANA SMITH: And, Mary, Wells Fargo, I know, also has an Open for Business Fund that's boosting access to minority lending. What has demand been like for this initiative?
MARY MACK: Really high demand for Open for Business. So we decided after the first round of PPP that we all knew more was needed. And so what we committed to do was take 100% of our gross processing fees-- it's about $420 million-- from the first round and put it directly back into small business recovery-- working with community development financial institutions, CDFIs, working with technical assistance and those businesses that need to retool or resiliency efforts. And we went out to the broad community across the country, received a number of applications, and we're now getting that money out into those communities.
SEANA SMITH: Mary, what advice would you have or do you have for small business owners trying to expand or trying to start their business for the first time in this extremely challenging environment?
MARY MACK: Well, there are a lot of resources out there. So businesses and business owners need to focus on the strength of their credit and their credit history. That's really important. But access the small business sight. organizations like Wells Fargo-- we have a ton of resources online available for small businesses. Build a business plan, get help.
Get advice. We're investing in broader communities like minority depository institutions, MDIs, that serve some of the historically underserved communities to make sure that everybody has access to those resources. So avail yourself of it. It might be a trusted friend, a colleague, somebody you've seen doing this before who's already navigated some of this road, but get advice, lean on it, ask for help. It's a really important part of the process. And find a trusted advisor to help you through it.
SEANA SMITH: Mary, how long do you expect it to take for small businesses to return to quote unquote "normal operations?" And then within that realm, we know that there's been so many changes in behavior here over the last 12 months. When we look at what the new normal is going to look like for small businesses, what is that in your view?
MARY MACK: Well, that's exactly what I was-- my answer to your question was going to. Be we'll have to figure out what normal is first. And I think it will continue to evolve. I've said a lot then if this pandemic had been what we thought it was maybe a year ago, and we were all navigating this for weeks or months, you might not have seen some of the permanent behavior change that I suspect we'll see over time.
And again, as I mentioned-- over 75% of companies that we see are figuring out how to retool. I'm just impressed and amazed, really, at the grit and resiliency that we see as they redefine what their model is, and figure out who the consumer is, and how the consumer behaves going forward. I don't know that that's going to be a static answer either. It'll probably continue to evolve.
SEANA SMITH: And speaking of the consumer, the credit performance on the consumer side for Wells Fargo has improved here. What are you expecting just in terms of spending trends for the second half of this year?
MARY MACK: Well, we're seeing the latest round of stimulus has been really important to consumers. We did see some spending pick up after those stimulus payments were out, and we could see people begin to lean back into things that a lot of us haven't done-- travel, entertainment, other things are beginning to crawl back up. So we'll see.
I'm impressed with the responsibility and the focus on controlling debt, really taking care of your own finances first that I think is a very healthy sign for the consumer. But we do anticipate that it'll continue to improve over time as everybody gets more comfortable, we've got more access, we develop more immunity through vaccines, et cetera throughout the country. So we're looking forward to that.