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Wells Fargo Leaves Nonprime Space, Says Goodbye to 3,800 Employees

""Wells Fargo & Company"":https://www.wellsfargo.com/ recently announced that it is restructuring its financial division--a move which[IMAGE]

outlines for the closure of 638 Wells Fargo Financial stores, as well as for the company to stop originating nonprime portfolio mortgage loans.

San Francisco-based Wells Fargo explained that this move is the result of its 2008 acquisition of Wachovia Corp, which makes these units no longer necessary. According to Wells Fargo, this restructuring will not impact the number of community banking or home mortgage stores in operation.

Upon this announcement, David Kvamme, president of Wells Fargo Financial, stated that, ""Our network of U.S.-based consumer finance stores, which have historically operated as an independent sales channel form 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 United States.""

Despite the assurances from Wells Fargo that existing customers with consumer loans under Wells Fargo Financial and clients with Wells Fargo Financial's commercial businesses would continue to receive service uninterrupted, many of Wells Fargo Financial's team members won't fare as well. According to a company press release, of the 14,000 employees at Wells Fargo Financial, approximately 2,800 positions will be eliminated within the next 60 days, with an additional 1,000 positions to be eliminated during the next 12 months.

""We know that this decision will be extremely difficult for those dedicated team members and their families who will be affected,"" said Kvamme. ""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.""

About Author: Rachel Daniels

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