Wells Fargo signage on May 5, 2021 in New York City.
Bill Tompkins | Michael Ochs Archive | Getty Images
Wells Fargo is reversing an unpopular decision to close personal lines of credit to its customers.
Last month, CNBC reported that the bank had notified customers that the revolving credit lines would be closed after a product review. In a six-page letter, the bank warned the measures could affect users' creditworthiness, a possibility that upset some people.
The decision has been criticized by consumers who have relied on the product as well as Senator Elizabeth Warren, a frequent critic of the banking industry. Wells Fargo has suffered a number of reputational damage after it was revealed in 2016 that employees improperly opened millions of fake accounts.
Now the bank has decided to keep the credit lines free for those who have actively used them or want to reactivate old ones, according to a spokeswoman for the San Francisco-based company. However, the product is not offered to new customers.
According to the CNBC report released last month, customers asked the bank to keep their accounts open to avoid any inconvenience, according to a person with direct knowledge of the situation. Another consideration was the potential impact on creditworthiness, said the person who refused to be identified, speaking of the bank's internal considerations.
Of personal loan customers, 60% have actively used them and the rest have not in the past 12 months, the person said.
The bank has started sending letters to customers informing them of the company's change of heart, the person said.
Here is the complete list of the bank:
As part of our strategic corporate review last year, we found that our range of other consumer products serve our customers better than private lines of credit. As a result, we stopped opening these lines in May 2020 and recently informed customers that we were planning to close existing lines. We have heard feedback from our customers and this feedback is very important to us; We respond by making sure customers can keep these lines of credit open.
For customers who have used their lines, we inform them that their lines will remain open and that they can continue to use them. Customers whose accounts have been inactive in the last 12 months and want to keep their lines open can call us or simply use their connection. For inactive customers who do not activate their lines in one of these ways, the accounts will be closed on December 2nd, 2021.
Since August 17th, we have been communicating with all customers who received the earlier letters to inform them of this change, both by email and in writing.
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