Wells Fargo is set to close 638 financial stores across the US and exit the origination of non-prime portfolio mortgage loans, as part of restructuring its financial division Wells Fargo Financial.
Wells Fargo said that the remaining consumer and commercial loan products offered through Wells Fargo Financial will be realigned with those offered by other business units and will be available through its network of community banking and home mortgage stores.
Wells Fargo Financial’s commercial businesses will be realigned with business units within the organisation over the next 12 months. However, Wells Fargo will no longer originate non-prime portfolio real estate loans.
Wells Fargo added that less than 2% of all of its real estate loans were originated in its financial division in the first quarter of 2010.
Wells Fargo said that the restructuring process will eliminate approximately 2,800 positions during the next 60 days, and 1,000 positions during the next 12 months, out of 14,000 team members at Wells Fargo Financial. However, the remainder of the team members will be reassigned to other Wells Fargo businesses.
David Kvamme, president of Wells Fargo Financial, said: “Our network of US-based consumer finance stores, which have historically operated as an independent sales channel from our bank operations, have served customers well for more than 100 years, but the economics of a separate Wells Fargo Financial channel are no longer viable, especially now that our customers have access to the largest banking and mortgage store network in the US.
“We know that this decision will be extremely difficult for those dedicated team members and their families who will be affected. We have already identified positions for thousands of our employees and are committed to finding new positions for as many impacted team members as possible.”