In a sign the nation’s financial crisis isn’t over, San Francisco’s Wells Fargo, the nation’s third-largest bank, said it would close its division that makes loans to risky borrowers.
At least one Wells Fargo consumer financing branch will close in The City within the next year. Though exact locations were not announced, Wells Fargo spokesman Steve Carlson said all 638 U.S. consumer financing offices will close and 3,800 jobs will be cut in the next 12 months.
The company will no longer offer subprime real estate loans, the type made to borrowers with less than stellar credit, Carlson said. These consumer financing offices offered auto and home loans and credit card accounts.
In the first quarter of this year, Carlson said, only 2 percent of the company’s real estate loans originated in Wells Fargo Financial branches.
He said Wells Fargo will continue to offer those services at its 6,600 other banking and 2,200 home loan finance branches nationwide. The need for the stand-alone consumer finance branches has diminished.
Carlson said the closure of all these branches is a result of the company’s 2008 merger with Wachovia.
“With the Wachovia integration, those stores became duplicative,” he said. “We still have the bank network and home mortgage stores.”
A solo financing branch is located at Sansome and Bush streets in San Francisco. Ten other stores are listed throughout the Bay Area, including in San Jose, Sunnyvale, Concord, Pleasanton and Fremont. There are 74 financing branches in California.
According to the company, approximately 2,800 positions will be eliminated in the next 60 days and an additional 1,000 will be eliminated in the next 12 months. Wells Fargo said it has 14,000 positions with Wells Fargo Financial, and the remaining employees will be reassigned to other Wells Fargo businesses.
Jim Wunderman, president of the Bay Area Council business leadership group, said regardless of the economic times, the company would most likely make similar decisions.
“In order to remain competitive, you have to be efficient and use resources the best way you can,” Wunderman said. “Some jobs will be lost and that’s unfortunate.”
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