Wells Fargo (NYSE:WFC) is reversing an unpopular decision to shutter personal lines of credit for its customers.
Last month, media reports surfaced that the bank had informed customers that the revolving credit lines would be closed after a product review. In a six-page letter, the bank warned that the actions could impact users’ credit scores, a possibility that agitated some people.
The decision drew criticism from consumers who lean on the product as well as Massachusetts Sen. Elizabeth Warren, a frequent critic of the banking industry. Wells Fargo has dealt with a series of reputational blows after it was revealed in 2016 that employees had improperly opened millions of fake accounts.
Now, the bank has decided to keep the credit lines available for those who actively used them or want to reactivate old ones, according to a spokeswoman for the San Francisco-based company. It will not offer the product to new customers, however.
After last month’s media storm, customers asked the bank to keep their accounts open to avoid inconvenience, according to a person with direct knowledge of the situation. Another consideration was the potential impact on credit scores, said the person, who declined to be identified speaking about the bank’s internal deliberations.
Of the customers with personal lines of credit, 60% actively used them, while the rest hadn’t in the past 12 months, said the spokesperson, who added the bank has begun sending letters to customers informing them of the company’s change of heart.
WFC shares fell 50 cents, or 1%, to $47.47
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