Why is Wells Fargo closing accounts?
Wells Fargo closing all personal lines of credit, which may affect customer credit scores. ... The bank said it is discontinuing the product so it can focus on personal loans and credit cards, and warned in its letter that the closure of the accounts "may have an impact on your credit score." The Week MagazineWells Fargo closing all personal lines of credit, which may affect customer credit scores
In a six-page letter to customers obtained by CNBC, Wells Fargo said that it had “recently reviewed its product offerings and decided to discontinue offering new Personal and Portfolio line of credit accounts and close all existing accounts,” instead setting its focus on credit cards and personal loans.
The revolving credit lines had been a popular consumer lending product, allowing customers to consolidate higher-interest credit card debt, avoid overdraft fees on checking accounts, as well as other actions.
The credit lines usually allowed customers to borrow anywhere from $3,000 to $100,000, according to CNBC.
In a FAQ portion of the letter, the bank explained that the account closures “may have an impact on your credit score,” adding that they could not be reviewed or reversed.
“We apologize for the inconvenience this Line of Credit closure will cause,” the bank said, according to CNBC. “The account closure is final.”
In a statement sent to CNBC after its initial report was published, a Wells Fargo spokesman said, “We realize change can be inconvenient, especially when customer credit may be impacted,” adding that the bank was “committed to helping each customer find a credit solution that fits their needs.”
According to the news outlet, Wells Fargo said customers will be given a notice 60 days before their account is shut down, with remaining balances requiring minimum payments at a fixed rate.
The Hill has reached out to Wells Fargo for additional information.
In 2018, the Federal Reserve imposed an asset cap on the bank to limit its ability to grow its balance sheet until it addressed the improper accounts and practices.
That same year, Wells Fargo agreed to pay $1 billion in a settlement over charges that the bank had levied inappropriate fees on mortgage borrowers and forced loan customers to purchase auto insurance.
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