By Joseph Chalfant
Wells Fargo is moving to eliminate all current personal lines of credit and will no longer offer it in the future.
The company used personal lines of credit to allow customers to borrow from $3,000 to $100,000. Loans were typically used for anything from home renovations to avoiding overdraft fees, according to CNBC.
Wells Fargo gave customers a 60-day notice ahead of account closures and required them to make minimum fixed-rate payments. Customers were also told that the decision could not be reversed.
“Wells Fargo recently reviewed its product offerings and decided to discontinue offering new Personal and Portfolio line of credit accounts and close all existing accounts,” Wells Fargo said in a letter obtained by CNBC. “We apologize for the inconvenience this Line of Credit closure will cause. The account closure is final.”
Customers were also warned that the closures could impact their credit scores. Consumers’ Bulletin has reached out to Wells Fargo to receive more information but has not received a response.
“We realize change can be inconvenient, especially when customer credit may be impacted. [We are] committed to helping each customer find a credit solution that fits their needs,” said Wells Fargo in response to the CNBC report.
Although no exact figures are known, $24.9 million in “other consumer” loans were granted as of March 2021, according to CNBC. The move to eliminate more consumer lending follows a trend of cuts that Wells Fargo has made to balance their budget in recent months. In 2020, the company cut home equity and reduced auto loans.
The company has been embroiled in financial upheaval for some years now. The Federal Reserve imposed an asset cap at $2 trillion after the organization found that Wells Fargo had engaged in “widespread consumer abuses” for creating up to 3.5 million fake accounts to meet sales goals in 2018.
Later that year, the company was required to pay out a $1 billion fine and create a compliance committee after the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) saddled mortgagors with undue fees and required customers to purchase unneeded auto insurance policies.
