Wells Fargo will no longer offer personal lines of credit to customers and will close existing ones in the coming weeks, according to a CNBC report.
Revolving lines of credit were a popular consumer loan product, which typically gave users between $ 3,000 and $ 100,000 in revolving lines of credit and was touted as a way for customers to consolidate credit card debt to higher interest or avoid overdraft charges on checking accounts.
“Wells Fargo recently revised its product offerings and decided to stop offering new personal line of credit and wallet accounts and close all existing accounts,” the bank said in a six-page letter to customers. obtained by CNBC.
The move would instead allow the bank to focus on credit cards and personal loans, the letter said.
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Customers were given 60 days’ notice before their accounts were closed, with remaining balances requiring regular minimum payments at a fixed rate, according to CNBC.
Wells Fargo also warned customers that account closings “could impact your credit score,” CNBC reported.
The move comes after the Federal Reserve banned the bank from increasing its balance sheet until it resolves compliance issues resulting from the bank’s fake accounts scandal. Last year, the bank announced it would no longer offer home equity lines of credit and later said it would stop providing auto loans to most independent car dealerships.