Wells Fargo & Co., one of the largest U.S. lenders, told employees this month that it's considering cutting foreign workers, citing political pressure stemming from the government's bailout of the banking industry, according to an internal email obtained by Dow Jones.
Wells got $25 billion from the Troubled Asset Relief Program in October, joining other big banks accepting government support, including Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group.
When the stimulus bill became law in February, it included rules that made it more difficult for TARP recipients to hire foreign workers on so-called H-1B visas.
The H-1B program allows temporary employment of people from overseas who have specialized skills and education. Technology companies use it a lot, but the 12 biggest banks that took TARP money requested visas for more than 21,800 foreign workers in the past six years, according to the Associated Press.
The legislation doesn't apply to current employees of Wells and other TARP recipients who need to have their existing H-1B visas renewed. However, Wells is letting those visas expire anyway, according to a copy of an internal email sent to some of its foreign employees on March 20 from the bank's human resources department.
"The receipt of TARP funds does not specifically say that we can not renew visas...[but] there are much more stringent expectations around it," the email said. "Due to the fact that we have and will be displacing numerous U.S. citizens in your same positions Wells Fargo has decided to enforce a policy that prohibits lines of businesses to file visa sponsorships for foreign nationals that would hold positions that could otherwise be held by qualified U.S. citizens."
"As a recipient of these funds we feel as a company we could not justify to our political officials the need to provide sponsorship," the email added.
The decision was made at "the Enterprise level" and is a company-wide policy that won't come back up for consideration for at least the next 18 months, the email also noted.
Janis Smith, a spokeswoman for Wells Fargo, denied this is a company-wide policy, saying: "We're looking at this on a case-by-base basis."
Smith also noted that Wells has always tried to hire people in the U.S. "whenever possible."
"As a result, today we have less than 0.04% of our team members under H-1B sponsorships," Smith added. "So, this bill would have little if any affect on our hiring."
This contrasts with Goldman Sachs, another TARP recipient, which is renewing existing H-1B visas and continues to offer jobs to foreign workers who need new temporary visas to join the investment bank.
"We will make offers to the best people regardless of where they live," said Ed Canaday, a Goldman spokesman.
Morgan Stanley spokeswoman Mary Claire Delaney said the firm is complying with the new TARP legislation "as it applies to the filing of H-1B applications for new and existing employees."
This is the latest example of how government support has introduced more politics into the management of the nation's largest banks.
Politicians have put pressure on banks to keep lending, despite rising defaults and a dwindling pool of creditworthy borrowers. After a national furor over bonuses at American International Group and Merrill Lynch, Congress has also toyed with legislation that would tax bonuses at financial firms that have received lots of bailout money.
The new H-1B rules were driven by debate over whether taxpayer dollars supporting TARP recipients should be used to pay the salaries of foreigners. The issue is particularly sensitive at time when banks are laying off thousands of workers, the majority of whom are American.
"The banks are of course concerned about public relations," said Ron Hira, an expert on offshore outsourcing and industrial policy at the Rochester Institute of Technology. "They've been pretty tight-lipped about their intentions."
With unemployment surging, there's no need for companies to hire foreign guest workers through the H-1B program when there are plenty of qualified Americans looking for jobs, Sen. Chuck Grassley, R-Iowa, said in February.
Grassley sponsored the amendment to the stimulus bill that made it harder for TARP recipients to hire overseas workers on H-1B visas.
"Our common-sense amendment simply ensures that recipients of American taxpayer money make American workers their first priority," he added.
Soon after, Bank of America pulled job offers for more than 50 foreign students who would have needed H-1B visas to join the bank.
Spokeswoman Sara Bloomquist said the decision "does not otherwise impact our recruiting efforts." However, she declined to comment on the bank's policy toward current employees of the bank and its newly acquired Merrill Lynch investment bank, who may need their visas renewed.
A Citigroup spokesman said the bank is complying with the new H-1B law.
"We are exploring potential opportunities in our non-U.S. global operations for those who may be affected by the law," he added.
A JPMorgan spokesman hadn't responded to requests for comment by late Tuesday morning.
