Wells Fargo (NYSE: WFC) announced it is closing all personal credit lines, one of its most popular products, ultimately upsetting several customers. All existing lines will be shut down in the coming weeks.
The credit lines, known for lending users anywhere from USD3,000 to USD100,000, were created to consolidate high interest credit card debt, fund home renovations or avert overdraft fees on linked checking accounts.
A spokesperson detailed the reasoning in a statement to Fox Business; “As we simplify our product offerings, we made the decision last year to no longer offer personal lines of credit as we feel we can better meet the borrowing needs of our customers through credit card and personal loan products. We realize change can be inconvenient, especially when customer credit may be impacted. We are providing a 60-day notice period with a series of reminders before closure, and are committed to helping each customer find a credit solution that fits their needs.”
According to the bank, the move is meant to allow the company to focus on credit card and personal loans
Amid the ongoing coronavirus pandemic, Wells Fargo CEO has been forced to get rid of assets and deposits as well as disassociating from certain products due to limitations imposed by the Federal Reserve. In 2018, the Fed prohibited Wells Fargo from increasing its balance sheets until it corrected compliance issues found by the bank’s fake accounts scandal.
As a consequence of the new move, Wells Fargo did warn customers that the account closures “may have an impact on your credit score.”