Wells Fargo & Co. said it’s shutting down all existing personal lines of credit and will no longer offer the product to its customers.
“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,” the bank said in an emailed statement. The firm has been providing existing customers with 60-day notices their accounts will be closed, with a fixed rate and minimum payment for their remaining balances, it said.
Under Chief Executive Officer Charlie Scharf, Wells Fargo has been exiting businesses deemed inessential with the goal of simplifying operations and improving profitability following years of scandals. Earlier this year, the bank agreed to sell its asset-management and corporate-trust units, and last year it agreed to divest a $10 billion private student-loan book.
Personal credit lines are often used to purchase expensive items like vacation homes, boats or planes. They are often collateralised with stock portfolios. The most public user of these kinds of vehicles is Elon Musk who has borrowed significant sums against the value of his Tesla shares. It has also been a popular vehicle in China where entrepreneurs have staked their holdings in order to source additional funds.Click HERE to subscribe to Fuller Treacy Money Back to top