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By Terrance Turner
July 8, 2021
Wells Fargo is shutting down all personal lines of credit. It will no longer offer them, according to customer letters reviewed by CNBC. The revolving lines of credit, which let users borrow between $3,000 and $100,000, were pitched as a way to consolidate credit card debt and or pay for home renovations.
“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,” the bank said in a six-page letter. Wells Fargo said the move will help them better meet consumer needs with credit cards and personal loans.
“We apologize for the inconvenience this Line of Credit closure will cause,” the bank continued. “The account closure is final.”
Wells Fargo says that the closure “may have an impact on your credit score”. But a spokesman said the bank is “committed to helping each customer find a credit solution that fits their needs”. Customers were given a 60-day notice about the change. Sen. Elizabeth Warren (D-Mass.) says that’s not good enough. “Sending out a warning notice simply isn’t good enough — Wells Fargo needs to make this right,” she tweeted today.
But Warren was far from the only one objecting to the bank’s actions. Shares of Wells Fargo & Co. dropped 2.49% today, according to MarketWatch, and Twitter users let the bank have it:
House Rep. Katie Porter (D-CA) pointed out last week that the bank is facing a new probe from the Consumer Financial Protection Bureau over checking-account practices. “For years, Wells Fargo used deceptive fine print to scam families out of hundreds of millions,” she wrote on June 30.
In 2016, Wells Fargo made headlines after being fined $185 million for illegal banking practices. It had opened 1.5 million fake bank accounts and filed over 500,000 credit card applications without customers’ knowledge or consent, per the New York Times. Bloomberg later reported that the total number of fraudulent accounts was up to 3.5 million. Last year, the Times revealed that Wells Fargo had reached a $3 billion settlement to settle criminal charges and civil action related to its actions.
“From 2002 to 2016, employees used fraud to meet impossible sales goals. They opened millions of accounts in customers’ names without their knowledge, signed unwitting account holders up for credit cards and bill payment programs, created fake personal identification numbers, forged signatures and even secretly transferred customers’ money,” the Times reported last February.