Wells Fargo is shutting down all personal lines of credit that typically gave users $3,000 to $100,000, telling customers the account closings are final and ''may have an impact on your credit score,'' CNBC reports.
The move is expected in the coming weeks. Current customers with credit lines must pay off the balances at a fixed rate.
''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 a letter to customers.
Wells Fargo has been operating under a $1.95 trillion asset cap for more than three years, considered one of the costliest bank punishments ever, after reaching a settlement with federal prosecutors and the Securities and Exchange Commission over its abuse of customers in a phony account scandal.
The cap constrains the bank from making loans and growing as rapidly as other banks. But Wells Fargo is said to be on the brink of exiting the penalty box.
The bank did not answer questions directly related to the federal asset cap and whether it played a role in its decision to shut down the credit lines.
''In an effort to simplify our product offerings, we've made the decision to no longer offer personal lines of credit as we feel we can better meet the borrowing needs of our customers through credit card and personal loan products,'' it told CNBC in a statement.
A Wells Fargo spokesman later said: ''We realize change can be inconvenient, especially when customer credit may be impacted,'' adding that the bank is ''committed to helping each customer find a credit solution that fits their needs.''
One customer told the news outlet it was changing banks as a result.
''It's a bit upsetting,'' Tim Tomassi, a programmer in Portland, Oregon, said in a phone interview. ''They're a big bank, and I'm a small person, and it feels like they're making decisions for their bottom line and not for customers. A lot of people are in my position. They need a cushion every once in a while from a line of credit.''
© 2021 Newsmax. All rights reserved.