Wells Fargo shuts down all personal lines of credit, sparking outrage

Wells Fargo shuts down all personal lines of credit, sparking outrage.

https://www.cnn.com/2021/07/08/business/wells-fargo-shutting-credit-lines/index.html

 

It's an interesting decision. It doesn't mean everyone suddenly has to pay off their existing accounts just that no new credit will be extended to new or existing account holders. Wells Fargo (of which bank I am a very satisfied, long term customer for FD) tends toward the opaque if you can believe the financial press. I don't know what they're trying to accomplish here. Loaning money is what banks DO. NOT loaning money is what banks DON'T do.

I am a member of the local credit union and I like them very much but they don't offer the kinds of services I use or at least not so readily. Now that I think about it, though, I haven't really looked very hard. Could well be that I'm missing out.

Then again, I am the only person I know who loathes "It's a Wonderful Life". There is so much WRONG with everything about that movie, not least the slipshod management of the Building and Loan, a.k.a. Credit Union. So maybe I'm just biased.

 

How would the WFB decision affect people credit scores?
If persons paying on time and transferring the entire debt to another lender?

 

A line of credit reduction can increase the utilization rate of individuals who carry balances or manage debt. Utilization rates are one of the major factors in credit scores. Closing the account can also negatively impact avg. open account durations, another factor of credit scores.

 

Thank you, understood.