Wells Fargo to Shut Personal Credit Lines in Shift to Cards
(Bloomberg) -- Wells Fargo & Co. said it’s shutting down all existing personal lines of credit and will no longer offer the product to its customers.
“In an effort to simplify our product offerings, we’ve made the decision 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,” the bank said in an emailed statement. “We realize change can be inconvenient, especially when customer credit may be impacted.”
The portfolio is part of Wells Fargo’s broader personal lending book, which was $5 billion at the end of March. The breakdown of personal loans versus lines of credit within that portfolio couldn’t be learned immediately. The bank said it’s been providing existing customers with 60-day notices their accounts will be closed, with a fixed rate and minimum payment for their remaining balances.
Under Chief Executive Officer Charlie Scharf, Wells Fargo has been exiting businesses deemed inessential with the goal of simplifying operations and improving profitability following years of scandals. Earlier this year, the bank agreed to sell its asset-management and corporate-trust units, and last year it agreed to divest a $10 billion private student-loan book.
Last year, Wells Fargo said it would temporarily stop accepting applications for home equity lines of credit, following a similar move by rival JPMorgan Chase & Co. That move was part of the lender’s navigation of the economic impact of Covid-19, a company spokesman said at the time. The bank, which issues loans for new and used car purchases, also told hundreds of independent auto dealerships that it was dropping them as customers, CNBC reported at the time.
The decision on lines of credit was reported earlier Thursday by CNBC.
©2021 Bloomberg L.P.