Posted on 07/08/2021 4:41:54 PM PDT by 11th_VA
Wells Fargo has begun informing customers that it will no longer be offering personal credit lines, with all existing lines being shut down in the coming weeks.
In a six-page letter to customers obtained by CNBC, Wells Fargo said it had "recently reviewed its product offerings and decided to discontinue offering new Personal and Portfolio line of credit accounts and close all existing accounts," instead setting its focus on credit cards and personal loans.
The revolving credit lines had been a popular consumer lending product, allowing customers to consolidate higher-interest credit card debt, avoid overdraft fees on checking accounts, as well as other actions.
The credit lines usually allowed customers to borrow anywhere from $3,000 to $100,000, according to CNBC.
In a FAQ portion of the letter, the bank explained that the account closures "may have an impact on your credit score," adding that they could not be reviewed or reversed.
"We apologize for the inconvenience this Line of Credit closure will cause," the bank said, according to CNBC. "The account closure is final."
In a statement sent to CNBC after its initial report was published, a Wells Fargo spokesman said, "We realize change can be inconvenient, especially when customer credit may be impacted," adding that the bank was "committed to helping each customer find a credit solution that fits their needs."
According to the news outlet, Wells Fargo said customers will be given a notice 60 days before their account is shut down, with remaining balances requiring minimum payments at a fixed rate. …
(Excerpt) Read more at thehill.com ...
Interesting.
Of course, in this case, there's no reserve currency more senior to the dollar. I'm sure Wells Fargo loans dollars and expects to be repaid in dollars.
If they inserted an inflation-rate clause in their loan documents, I would think that would have an immediate and dramatic effect, at least for Wells Fargo. By introducing a term into the mortgage equation that can't be predicted by the borrower, they would drive away many credit-worthy customers, particularly those who are not fools. They would have to offer a very low base interest rate to compensate for the fear this unknown would cause.
If they were able to put it over, other banks would follow suit. This would bring the inflation rate home every night to millions of young potential borrowers, something the Biden gang would not find convenient.
This is just fallout from their fake accounts scandal from a year or two ago. Wells Fargo has traditionally crossed the line when it comes to fair and reputable banking policies and standards.
The government has put them on a short leash. It wasn’t that long ago that Wells Fargo was illegally repossessing cars from our servicemen. A flagrant violation of the sailors and soldiers relief act.
I really don’t understand why people bank with Wells Fargo. Yes there is a branch on every corner in every town in America but so is a pawnshop
And you will likely get a better deal and be treated more fairly at a pawnshop.
Wells Fargo is just a complete garbage operation.
Canary > IMO
If other major banks adopt this, it could really put the brakes
on any recovery.
Perhaps major banks aren’t the big lenders they used to be.
I would think they still area.
I’d hate to see most banks go this route.
These loans have variable interest rates. Inflation hits hard, then rates will go up. WF makes up for the decline on dollars with intrest payments.
In theory, the Constitution prohibits ex post facto laws...
If they inserted an inflation-rate clause in their loan documents, I
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Keep in mind existing mortgages inflation rates were subject by government decree, no escaping it. Not likely in a capitalist society ( where mortgage contracts are law) however it was pulled off in socialist instated governments when inflation hit hyper levels. In my opinion, unprobable in the US unless we see hyper inflation and a collapse.
Perhaps major banks aren’t the big lenders they used to be.
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The legendary financial greats have written about our cashless system being debated in Congressional committee currently. Look up Fedcoin, our sovereign cashless digital system ! It is much closer than anyone realizes. Point, the greats have all said it would destroy all our major banks. Not much need for them when ( as currently written) the Fed Reserve will control all the Fedcoin accounts…at the push of a button, all purchases monitored, accounts can be turn off,or denied for certain purchases… think of it as a “ financial no fly list”…I am amazed at the ignorance of those pushing for a US sovereign digital currency…Biblical prophecy does state the coming of a cashless society- we are much closer to realization than any knows.
I had one, 9.9% unsecured credit so it was a good product.
Agreed. Wells Fargo is under increased scrutiny due to their fake accounts scandal.
They lost credibility with me for how they treated deployed military personnel, which you alluded to.
Much better alternatives out there, including credit unions (Navy Federal - very good).
Understatement.
Tiny fine, paid for by the dry same account holders they ripped off, when they were committing identity fraud.
With out seeing the contract and the note signed, it’s hard to say. However, with banks and mortgages, the note signed is generally a “demand” note. This means that the bank can call the note at any time. You either agree to the new terms or pay off the whole loan.
That is exactly what happened in the USA when inflation was rising and prime rate was @ 19%. Savings and Loan organizations, on the other hand typically made fixed rate loans without that feature and were stuck at a one digit rate. This played a part in the S&L meltdown.
The bank I worked for, generally had a variable rate for their revolving credit. This article also says that the WF customers with the current loans will be allowed to pay them off with fixed rate loans.
It may be that moving from revolving credit to personal loans allows the bank to keep a better eye on the ability to repay the loan.
The article states that the accounts were utilized to consolidate and pay off higher rate loans. So moving them to credit cards would no doubt increase their current margin/ROA, as well as giving more flexibility to respond to future rate changes and changes in the capital markets.
The CEO of Citibank was on TV a few weeks back stating that they weren’t really making loans-just sitting on cash and waiting for better(higher) interest rates.
Wells Fargo is evil. They are going to screw up a lot of credit scores and cost people many thousands of dollars.
Wells Fargo knows that the pandemic stimulus unemployment is ending.
I am expecting many other credit cards to be closed or the credit lines cut.
I agree with your prophecy mention.
Yeah, it’s a mess.
There’s something extremely unsettling about the Fed taking over.
Massive mistake > IMO.
“Wells Fargo is just a complete garbage operation.”
I agree 100%. I spent/wasted 2.5 hours closing my account at WF last year. The lady at the desk was chatting on the phone 3x, walked to the back office 3x and was generally confused about how to close a simple checking account. Other banks are professional but not WF.
Class action suit?
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