Wells Fargo has sent letters out to its customers saying that over the next several weeks, it will close all existing personal lines of credit, and no longer offer the product, CNBC reports.
Typically, customers with personal lines of credit can borrow between $3,000 and $100,000, with variable interest rates ranging from 9.5 to 21 percent. The product was marketed as a way for customers to pay for something big like a home renovation, or to consolidate high-interest credit card debt. The bank said it is discontinuing the product so it can focus on personal loans and credit cards, and warned in its letter that the closure of the accounts "may have an impact on your credit score."
This comes three years after the Federal Reserve prohibited Wells Fargo from growing its balance sheet until it fixed compliance issues stemming from its account fraud scandal, which saw millions of fake savings and checking accounts opened by the bank for clients without their consent. Sen. Elizabeth Warren (D-Mass.) blasted Wells Fargo on Thursday, tweeting that not a single customer "should see their credit score suffer 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."
In a statement to CNBC, Wells Fargo said it realizes "change can be inconvenient, especially when customer credit may be impacted" and it is "committed to helping each customer find a credit solution that fits their needs." Clients will be told 60 days before their accounts are shut down, with their remaining balances paid off over regular minimum payments at a fixed rate.