Warren slams Wells Fargo decision to close customer credit lines
Sen. Elizabeth WarrenElizabeth WarrenOvernight Health Care: FDA narrows use for controversial new Alzheimer’s drug after criticism | Pfizer to seek FDA authorization for booster of COVID-19 vaccine | House report: Drug companies spent more on buybacks, dividends than research On The Money: Business, labor groups endorse bipartisan infrastructure deal | Conservatives oppose IRS funding | Jobless claims rise, stocks fall Hillicon Valley: Warren asks SEC to take closer look at cryptocurrency exchanges | Maryland town knocked offline as part of massive ransomware attack | Huawei hires three new lobbying firms MORE (D-Mass.) blasted Wells Fargo’s decision this week to close customers’ personal credit lines.
CNBC reported on Thursday that the bank alerted customers that existing lines of personal credit would be closed in the next few weeks and it was no longer offering the consumer lending product.
The letter also reportedly said that these closures “may have an impact on your credit score,” which was included in a frequently asked questions portion of the letter, CNBC reported.
“Not a single @WellsFargo customer should see their credit score suffer just because their bank is restructuring after years of scams and incompetence. Sending out a warning notice simply isn’t good enough – Wells Fargo needs to make this right,” tweeted Warren, who has been critical of big banks.
Not a single @WellsFargo customer should see their credit score suffer just because their bank is restructuring after years of scams and incompetence. Sending out a warning notice simply isn’t good enough – Wells Fargo needs to make this right. https://t.co/wyuuY2WEk5
— Elizabeth Warren (@SenWarren) July 8, 2021
Previously, customers were able to draw thousands to tens of thousands of dollars in personal lines of credit to pay for things such as home renovations or to combine credit card debt with high interest rates.
In 2018, the Federal Reserve told the bank it could not grow its balance sheet following a fake accounts scandal in 2016.
In a statement Thursday regarding the decision, the bank told CNBC, “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.”
“We realize change can be inconvenient, especially when customer credit may be impacted,” Wells Fargo spokesman Manny Venegas added in an additional emailed statement to CNBC.
“We are providing a 60-day notice period with a series of reminders before closure, and are committed to helping each customer find a credit solution that fits their needs,” Venegas added.
Wells Fargo did not immediately address Warren’s remarks or why customers’ credit scores would be affected, though CNBC noted that with less credit available for a customer to use, it would likely mean that customers would have to draw more from available credit, in effect hurting their credit score.
The Hill has reached out to Wells Fargo for comment.