Wells Fargo has said it will stop offering personal lines of credit and close those checking accounts.
The bank will no longer offer the product, which allowed users to borrow between $ 3,000 and $ 100,000 and was touted as a tool to consolidate higher interest credit card debt, pay for home renovations and avoid debt. overdraft fees on linked accounts.
âWells Fargo recently revised its product offerings and decided to stop offering new personal line of credit and wallet accounts and close all existing accounts,â the bank said in a six-page letter that been reviewed by CNBC.
Wells Fargo shares at last check were down 1.3% to $ 42.86.
Customers have been given 60 days notice that their accounts will be closed and the remaining balances will require regular minimum payments, CNBC reported.
The move is part of the reimagining by CEO Charles Scharf of the San Francisco company. The bank had offloaded assets and deposits while cutting some products due to restrictions imposed by the Federal Reserve.
The Federal Reserve agreed to the bank’s overhaul plan in February after the central bank discovered that Wells Fargo had defrauded customers through techniques such as setting up unauthorized accounts.
In February 2018, the Fed banned Wells Fargo from raising its assets beyond their end-2017 level until it implements certain reforms.
Last year Wells Fargo said it would pay $ 3 billion to settle the Securities and Exchange Commission and Department of Justice investigations into the fake accounts scandal.
In April, the bank beat analysts’ earnings expectations for its final quarter. Wells Fargo, the fourth-largest U.S. lender, reported earnings of $ 4.74 billion, or $ 1.05 per share, compared to $ 653 million, or 1 cent per share, in the prior year period .