Posted on 07/08/2021 8:10:55 AM PDT by dynachrome
Wells Fargo is ending a popular consumer lending product, angering some of its customers, CNBC has learned.
The bank is shutting down all existing personal lines of credit in coming weeks and no longer offers the product, according to customer letters reviewed by CNBC.
The revolving credit lines, which typically let users borrow $3,000 to $100,000, were pitched as a way to consolidate higher-interest credit-card debt, pay for home renovations or avoid overdraft fees on linked checking accounts.
“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 bank said in the six-page letter. The move would let the bank focus on credit cards and personal loans, it said.
Wells Fargo CEO Charles Scharf has been forced to make difficult decisions during the pandemic, offloading assets and deposits and stepping back from some products because of limitations imposed by the Federal Reserve. In 2018, the Fed barred Wells Fargo from growing its balance sheet until it fixes compliance shortcomings revealed by the bank’s fake accounts scandal.
(Excerpt) Read more at cnbc.com ...
Good. They shouldn’t be used anyway.
I thought there was too much money out there in inflation? Why is a bank not wanting to lend money?
Inflation rising higher?
This is very interesting...
If this practice became widespread it would have a deflationary effect, since consumers would have less cash (than they otherwise would) to spend.
BOA did this years ago, they preferred raking in the overdraft fees
HELOCs are tools, They can be ver useful financial tools. I find it highly unusual they are doing this and it will be telling if this spreads to other banks andfinancial institutions. Weird, there just seem there may be something deeper to this story. Hope its not the canary in the coal mine.
Wells Fargo is a horribly unethical company.
I could only stomach working for them for 4 months.
The rates that they financially rape your standard oppressed individual is beyond the pale.
More like Wells is already in troubled waters and their cargo is shifting around on the deck. So they are taking action by trying to tie down some cargo (implementing IT controls that should have already been in place) and also getting rid of some cargo (no longer selling products) to reduce their exposure to possible loss.
This is being driven at least to some extent, by the findings that are referenced in the article. However, I suspect that their internal risk models are showing the potiential for loss in a high inflation market and they are just trying to lighten the risk burden if the economy goes into inflation mode.
Interesting, they see something and are preserving capital.
I was thinking of getting a heloc for home repair and possibly buying a 2nd home to move to without having to hurry the process.
>>Storm on the horizon?
Thats my take - look for more of this, i.e. big business trying to de-risk themselves for the coming Biden created economic crash.
CapitalOne did this to me several months back, despite 30+ years of 100% on-time payments, and a credit score of over 810, they cut my credit card credit limits in half (and it wasn’t just me).
Financial firms know what is coming ... be prepared.
It’s not just them. Any financial institution will rape the borderline customer on interest charges as well as over-draft.
Believe me. Many years ago, through bad personal decisions, I had high interest rate cards (36% on more than one) and a car loan also at 36%.
Thank God I got my stuff together and am no longer in that boat.
Good. They shouldn’t be used anyway.
Absolutely.
Why should Wells Fargo issue loans at 11% to pay off Wells Fargo credit cards that are charging >20%?
I think these are simply personal line of credit products, not HELOCs tied to a home.
Not helocs, personal lines/overdraft
It is horrible.
They wanted my finger print to cash a $20 check from our kiddo’s account. Had taught the kids to never use WF but that one rebelled.
The kids knew what crooks WF was when the parent person for their afterschool activity died and I tried to get their account straightened out. The bank employees attended the funeral but demanded the deceased come in. Since the deceased didn’t show up, they proceeded to demand I turn over my mortgage to them. They admitted they didn’t need signature cards and proved it by showing those hadn’t been updated for years. After over an hour arguing with them over the deceased not walking in their front door and not allowing me (with signed papers in hand and they knew of me) to close the account, they did let me (without my name on the signature card or a required second person’s signature) write a check for the balance.
Bad moon rising............................
I bet there are more than a few sole proprietorships that use these lines of credit for working capital. This will be yet another impediment to small businesses and small business startups.
Those are exactly the rates I shoved down peoples throats.
Glad you no longer need to resort to those rates or their slave-wagon.
Okay, my bad. Thanks. Yeah personal loans are more risky and I can see why they might faze those out.
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