Wells Fargo Closes All Personal Lines of Credit

Wells Fargo has started advising customers that it will no longer be offering personal lines of credit, with all existing lines being closed in the coming weeks.

In a six-page letter to clients obtained by CNBC, Wells Fargo said it had “recently reviewed its product offerings and decided to stop offering new personal line of credit and wallet accounts and to close all accounts. existing “, focusing instead on credit cards. and personal loans.

Revolving lines of credit were a popular consumer loan product, allowing customers to consolidate higher interest credit card debt, avoid overdraft fees on current accounts, and other actions.

Lines of credit typically allowed customers to borrow between $ 3,000 and $ 100,000, according to CNBC.

In an FAQ portion of the letter, the bank explained that account closings “could impact your credit score,” adding that they could not be reviewed or reversed.

“We apologize for the inconvenience caused by this line of credit closure,” the bank said, according to CNBC. “The closure of the account is final.”

In a statement sent to CNBC after the release of its initial report, a Wells Fargo spokesperson said: “We realize the change can be inconvenient, especially when customer credit can be affected,” adding that the bank was “committed to helping each customer find a loan solution adapted to their needs.

According to the outlet, Wells Fargo said customers will be given 60 days’ notice before their account is closed, with remaining balances requiring minimum payments at a fixed rate.

La Colline has contacted Wells Fargo for additional information.

The move comes as Wells Fargo has frequently sought to offset losses suffered since it was revealed in 2016 that the bank was charging fees on millions of accounts opened without customer consent or sold through deceptive means.

In 2018, the Federal Reserve imposed an asset cap on the bank to limit its ability to grow its balance sheet until it tackles inappropriate accounts and practices.

That same year, Wells Fargo agreed to pay $ 1 billion as part of a settlement for charges that the bank levied improper fees on mortgage borrowers and forced loan customers to purchase auto insurance.