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TEXT OF STORY
Kai Ryssdal:Elsewhere in the economy, mainly the financial sector, Wells Fargo is going to retire a few stagecoaches. All right, a whole branch of its business, to be clear. The fourth largest bank in the country’s closing 600 or so retail outlets. The company also said it’s going to stop selling subprime loans.
Marketplace’s Eve Troeh has more.
Eve Troeh: Wells Fargo Financial wrote loans for customers in mostly low-income neighborhoods, and sold those loans to investors. Not many buyers these days…
Banking consultant Bert Ely says today’s announcement formalizes the bank’s steady withdrawal from subprime lending.
Bert Ely: It can take a while for a large company to finally decide what to do with a particular business.
Ely says that decision may have been hastened by looming financial reforms.
Ely: Wells, as well as other companies, may feel that the regulations are just going to make certain forms of lending not very profitable.
Wells Fargo says it will still make loans through its branches and mortgage offices. Chris Kukla with the Center for Responsible Lending says many areas that had a Wells Fargo financial office didn’t have a branch.
Chris Kukla: If they close the only presence that they had in some of these communities, it actually starts to make it harder to get access to financial services.
He says Wells Fargo is distancing itself from subprime customers on the ground and keeping them off its bottom line.
I’m Eve Troeh for Marketplace.
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