Wells Fargo (WFC) – Get Report has discarded a plan to end personal credit lines for existing customers who actively use them or want to reactivate dormant accounts.
The bank on Tuesday began informing customers with personal credit lines that their accounts would remain open and they can continue to use them, according to a statement from Wells Fargo.
Customers who have not used their personal credit line in the past 12 months can inform the bank that they wish to continue the account or may just use the line of credit to keep the account open.
Accounts will be closed on Dec. 2 for customers who do not use the personal credit line or don't inform the bank that they wish to keep the line of credit it open.
The San Francisco bank, however, will not offer the product to new customers.
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Wells Fargo in May 2020 ceased opening new personal lines of credit, and last month it informed all customers that it would close all existing personal lines of credit for amounts between $3,000 and $100,000. Customers were informed that accounts would be closed in 60 days, which was very unpopular with customers.
In a July letter about its plans to end the personal credit line program, it also warned customers its decision could have an impact on credit scores.
The move is part of Chief Executive Charles Scharf's reimagining of the company. The bank had offloaded assets and deposits while removing some products due to restrictions imposed by the Federal Reserve.
The Federal Reserve accepted the bank's overhaul plan in February after the central bank found that Wells Fargo had defrauded customers through techniques such as establishing unauthorized accounts.
Shares of Wells Fargo on Wednesday were down slightly 0.2% to $47.87 in after hours trading. The stock closed the regular trading session down 1.5% to $47.97.
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