After Wachovia merger, Wells Fargo Finance Division shuts down

Because of the combined effects of subprime mortgage losses and merging with Wachovia, Wells Fargo has decided to close down the Finance Division. Only about 3,800 of the 14,000 jobs in the Finance Division can be lost. Line of credit loans and other financial products will still be offered by Wells Fargo, but within the bank branches.

Source of article: Wells Fargo to shut down Finance Division by Personal Money Store

What the Finance Division does

Open for over 100 years, Wells Fargo Finance has operated separately from Wells Fargo Banking. Financing for small personal loans, automobile loans, mortgages, and other large loans have been handled through Wells Fargo Finance Division. With $ 24.7 billion in real estate loans within the Wells Fargo Finance Division, only $ 1.5 billion of them are "prime". The Finance Division lost almost 5 percent of its value, which is about the very same as other lenders.

The Wells Fargo merger with Wachovia

Wells Fargo began a merger with Wachovia in 2008. The merger added branches and liabilities to the Wells Fargo balance sheets. There are about 6,600 branches of Wells Fargo/Wachovia banks and an additional 2,200 Wells Fargo Home Mortgage offices. The takeover of Wachovia was forced by government regulators, who wanted to ensure that Wachovia bank would not fail. As a separate entity, Wachovia was dissolved in March of 2010.

Wells Fargo plans on continuing to lend money

Customers who are borrowing money will nevertheless be able to approach Wells Fargo for help. Inside Wells Fargo branches, fast personal cash loan and auto loan for bad credit will still be offered as part of the banking products. Instead of offering subprime mortgages, Wells Fargo intends to focus on offering Federal Housing Administration loans. Loans are less likely to default back to the bank when they are supported by the federal government. The business will continue to service the $ 22.3 billion dollars in personal loans and auto loans.