Wells Fargo Announces Plans to Shut Down All Existing Personal Lines of Credit
Wells Fargo, an American multinational financial services company and the fourth-largest bank in the U.S., is ending all personal lines of credit and portfolio lines within the next few weeks and has stopped offering the services, according to a six-page customer letter reviewed by CNBC.
Follow Along: 31 Days of Living Richer
Modern Money Etiquette: Answering Thorny Questions About Tipping, Gifts and More
“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. CNBC mentioned that the bank plans to focus on credit cards and personal loans.
The revolving credit lines were typically used for debt consolidation, home renovations or to avoid overdraft fees on linked checking accounts. Customers could borrow $3,000 to $100,000. “We apologize for the inconvenience this Line of Credit closure will cause,” the bank said and as reported by CNBC. “The account closure is final.”
Follow: These Are the Best Banks of 2021 – Did Yours Make the Cut?
CNBC noted that in 2018, the Federal Reserve stopped Wells Fargo from growing its balance sheets until compliance issues were addressed following the bank’s fake accounts scandal. The bank was also ordered to pay $3 billion to settle criminal charges and civil action from this event that spanned 14 years, according to the Justice Department and as reported by The New Times. Wells Fargo CEO Charles Scharf also had to make some tough decisions during the pandemic because of these limitations, CNBC pointed out.
Read: Money’s Most Influential: Where Do Americans Get Their Financial Advice?
See: The Economy and Your Money: All You Need To Know
Customers were given a 60-day notice and the remaining balance will require regular minimum payments at a fixed rate, according to the statement. While Wells Fargo didn’t disclose the number of customers who use these credit lines, it had $24.9 billion in loans in a category under “other consumer” as of March and was 26% lower than the year before, according to CNBC.
More From GOBankingRates
What It Means To Live a Truly Rich Life and How To Achieve It
Monifi Review: Mobile Banking That Can Improve Your Budgeting
This article originally appeared on GOBankingRates.com: Wells Fargo Announces Plans to Shut Down All Existing Personal Lines of Credit
