Wells Fargo Changes its Mind About Closing Personal Lines of Credit

After tremendous backlash, one of the nation’s biggest banks has changed its mind about deciding to shutter personal lines of credit for its customers.

Customer backlash was so severe that Wells Fargo has reversed its decision it made earlier this summer.

The bank has decided to keep the products available for those who actively used them or want to reactivate old ones, according to a spokeswoman for the company.

Wells Fargo however will not offer the credit lines to new customers.

It was in July that CNBC reported Wells Fargo would be closing the lines of credit. According to a source with direct knowledge of the matter, customers had asked the bank to keep their accounts open.

Another source said that the bank considered the potential impact it would have on credit scores. In a six-page letter, the bank warned that the actions could impact users’ credit scores.
Wells Fargo has started sending letters to customers informing them of the company’s change of heart, the person said.

Of the customers with personal lines of credit, 60% actively used them, while the rest hadn’t in the past 12 months, said the source.
The bank has begun sending letters to customers informing them of the company’s change of heart, the person added.

Here is the bank’s full statement:

As part of our strategic review of businesses last year, we determined that our suite of other consumer products serve our customers better than personal lines of credit. As a result, we ceased opening these lines in May 2020, and recently notified customers that we planned to close existing lines. We heard feedback from our customers and that feedback is very important to us; we are responding by ensuring customers can keep these lines of credit open.

For customers who have been using their lines, we are informing them that their lines remain open and they can continue to use them. For customers whose accounts have been inactive for the past 12 months, if they would like to keep their lines open, they can call us or simply use their line. For those inactive customers who do not activate their lines in one of these ways, accounts will be closed on December 2, 2021.

Beginning August 17, we have been communicating with all customers who received the earlier letters to inform them of this change, using both email and written letters.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.