Wells Fargo Shuts Doors throughout Canada
Wells Fargo Financial Corporation Canada announced that it is closing its outlets across Canada and will cease making customer loans, maintaining only existing real estate, consumer and auto loan accounts. In a website statement to its customers, the company said that a recent analysis of their operations had prompted the decision to discontinue the origination of consumer loan products throughout its 130 stores in Canada. Additionally, the company will be suspending originations of private-label credit cards that it dabbles in.
This announcement is on the wings of its move to withdraw consumer lending from Canada that began in 2008 during the height of the economic and financial crisis that has been experienced around the globe. It exited the indirect auto-lending business in November of that same year. And in July of 2009, the company stopped offering home equity loans and residential mortgages in Canada. Wells Fargo and Company is one of the largest banks in the U.S., and Wells Fargo Financial was the largest of the company’s five Canadian business lines, with consumer receivables nearing almost two billion dollars at the end of April.
Before the financial crisis struck, U.S. lenders, including Wells Fargo and General Electric Company flourished in Canada, loaning money to home buyers and consumers, including many borrowers who may not have been approved for credit from Canadian lenders.
The financial services sector in Canada is towered over by domestic chartered banks, although many foreign lenders have managed to get footing in the country as well – a history that is marred by oftentimes dramatic entrances followed by quiet recoils. The Wells Fargo website claims that the company has been providing financial services and products in Canada for more than half a century. Some of Wells Fargo’s operations will remain in the country, including a Toronto administration building for existing mortgages and loans.
According to Rick Valade, president of Wells Fargo Financial Corporation Canada, existing customers will see no change to their account terms and conditions, and more than 450 employees of the company will remain in Canada to support its existing customers. Business loan operations and an insurance brokering and risk management services company will continue through umbrella divisions of the parent company.
In April of 2010, Wells Fargo and Company, with combined assets of more than fifty seven billion dollars, merged its asset lending business in Canada with similar operations via its buyout of Wachovia Corp in 2008. Wells Fargo Capital Finance was born from this merger.
