Wells Fargo has announced that it is terminating all its existing consumer credit lines, Zero Hedge reported. This is happening even though the bank’s users themselves have not wanted such a thing.
Revolving credit lines, which will close in the coming weeks, typically allow consumers to borrow between $ 3,000 and $ 100,000. They serve as a way to consolidate debt with higher credit card interest, pay for home repairs or avoid overdraft fees when checking accounts attached to the loan.
Customers have received 60 days’ notice that their accounts will be closed and the remaining balances will require regular minimum payments, according to the statement.
According to CNBC, this is another “difficult decision” facing Wells Fargo CEO Charlie Scharf, who has been forced to make cuts in the bank’s business due to restrictions imposed by the Federal Reserve years ago as punishment for the financial institution’s criminal scandals.
“Wells Fargo recently reviewed its product offerings and decided to discontinue offering new personal credit accounts and close all existing accounts,” the bank said in a six-page letter. This move will allow the bank to focus on credit cards and personal loans.
“The sudden closure will leave many customers without what could be a critical source of liquidity,” commented Zero Hedge. “What’s worse is that many will be punished for the decision, which will make it difficult to obtain credit from a new source. For CNBC, those whose credit lines are inadvertently closed will still see their FICO results punished as if they chose to close credit line willingly. “
With its latest move, Wells Fargo warned customers that closing your account “could affect your credit rating.” Another frequently asked question states that the closing of accounts cannot be reviewed or canceled: “We apologize for the inconvenience that will lead to the closing of the credit line,” the bank said. “Account closure is final.”
As early as 2018, the Fed banned Wells Fargo from expanding its balance sheet until central bank regulators decided that the bank had remedied its shortcomings in compliance with the requirements revealed by the fake account scandal and other consumer abuses.
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