Wells Fargo closes all personal lines of credit, sparking outrage

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A spokesperson for the bank said Wells fargo (CBEAX) made the move last year as part of an effort to simplify its product offerings. The bank believes it can better meet borrowing needs through credit cards and personal loans, the spokesperson said.

The popular consumer loan product that the bank is shutting down typically allows users to borrow up to $ 100,000, according to CNBC, which reported the news earlier Thursday. The product was presented to consumers as a way to consolidate higher interest credit card debt or pay for home renovations.

In notices to customers regarding the closure, the bank warned that the change could affect their credit scores.

Wells Fargo was all the rage on Twitter Thursday night following the CNBC report, with consumer advocates including Senator Elizabeth Warren, expressing his indignation.

“Not a single @WellsFargo customer should see their credit rating suffer just because their bank restructures after years of scams and incompetence. Sending a warning just isn’t enough – Wells Fargo needs to fix it . “

The news comes more than four years after a scandal erupted in which the bank admitted to opening millions of fake accounts, as well as forcing customers to pay for unnecessary car insurance or charge unnecessary mortgage fees. The Federal Reserve called it “widespread customer abuse” and in 2018 the central bank imposed a cap on Wells Fargo’s assets, essentially preventing it from increasing its balance sheet until it remedies the lack of conformity which led to the scandal.

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