Here’s why Wells Fargo customers are outraged right now
- Wells Fargo & Co says it will close all existing personal lines of credit.
- The bank will discontinue the consumer lending product in the coming weeks.
- The move could potentially have an impact on the customers' credit scores.
Wells Fargo & Co (NYSE: WFC) came under fire from its customers as the bank announced on Thursday night it was closing all existing personal lines of credit.
The consumer lending product that typically let customers receive up to $100,000 in revolving credit lines will be discontinued in the coming weeks, as per CNBC, which cited the bank’s six-page letter.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
“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 move would let the bank focus on credit cards and personal loans,” the letter read.
Senator Elizabeth Warren lashes out on Wells Fargo
In its 60-day notice to customers, the American multinational financial services company revealed that their accounts would be closed and warned of a potential impact on their credit scores as well.
Responding in a tweet, Senator Elizabeth Warren criticised Wells Fargo and said:
“Not a single Wells Fargo customer should see their credit score suffer just because their bank is restructuring after years of scams and incompetence. Sending out a warning notice simply isn’t good enough. Wells Fargo needs to make this right.”
Wells Fargo is yet to officially comment on the news.
Wells Fargo suspended home equity loans last year
Last year, the San Francisco-based bank also suspended home equity loans, citing the economic uncertainty related to the Coronavirus pandemic. The massive hit from the COVID-19 crisis pushed it into refusing loans to many of its independent auto dealer customers as well in 2020.
The news comes only a week after an ex-Wells Fargo employee alleged the bank operated ‘like a mafia’.
Wells Fargo shares still opened about 2% up on Friday and jumped another 1% in the next hour. At the time of writing, the $180.72 billion company has a price to earnings ratio of 30.48.