U.S. Senator Elizabeth Warren (D-MA) questions Charles P. Rettig, commissioner of the Internal Revenue Service, during the Senate Finance Committee hearing titled The IRS Fiscal Year 2022 Budget, in Dirksen Senate Office Building in Washington, D.C., June 8, 2021.
Tom Williams | Pool | Reuters
Wells Fargo’s decision to pull customers’ credit lines was lambasted by Sen. Elizabeth Warren.
The bank has been notifying customers that their personal lines of credit would be closed, a move that could potentially damage their credit scores, CNBC reported Thursday.
“Not a single customer should see their credit score suffer just because their bank is restructuring after years of scams and incompetence,” Warren, a Massachusetts Democrat, tweeted Thursday evening. “Sending out a warning notice simply isn’t good enough – Wells Fargo needs to make this right.”
It was the latest controversy to afflict Wells Fargo since its fake accounts scandal emerged in 2016. Bank employees were found to have improperly created millions of unneeded accounts to hit aggressive sales goals. The Federal Reserve took the unusual step of constraining the bank’s balance sheet in 2018, a restriction that has forced it to shun deposits and pare products.
Wells Fargo didn’t immediately respond to a request to reply to Warren’s comments.
The bank also hasn’t responded to e-mailed questions about why customer credit scores would be affected. However, by reducing the amount of credit a customer has available, the closures could raise their credit utilization ratios. This means borrowers would be using a greater percentage of their available credit, which may have a negative impact on their scores.
Wells Fargo told customers it made the decision to cull the lines, which ranged from $3,000 to $100,000 in revolving credit, to focus on its credit cards and personal loans. Yesterday, after publication of the CNBC piece, the bank issued this statement:
“We realize change can be inconvenient, especially when customer credit may be impacted,” bank spokesman Manny Venegas said in an e-mail. “We are providing a 60-day notice period with a series of reminders before closure, and are committed to helping each customer find a credit solution that fits their needs.”
This story is developing. Please check back for updates.
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