Wells Fargo Sheds Consumer Finance Unit; Customers, Employees the Ones Hurt (WFC)

Wells Fargo (NYSE: WFC) announced that it would be shutting down its consumer finance unit this year, eliminating 3,800 jobs or roughly 1.4% of its work force. The bank is nixing the 100-year-old operation on the heels of the fin-reg bill, which is forcing banks to become smaller and take fewer risks.Dick Bove, of Rochdale Securities, said in an interview this morning that this is a prime example of how the financial reform bill is a sham that will only hurt consumers and not banks. He also said, “There will be more closures, sales, and divestitures of this nature, in my view, as the bank shrinks. The fact that this business was closed and not sold; and the fact that it is in consumer finance is also telling. Ironically, it is likely that Wells will benefit by this closure by off-loading a sub-par operation.”He also noted, “The workers and consumers associated with this business will not (benefit). This is totally in keeping with my view that fin-reg will harm everyone but the banks. This, after all, is the ‘anti-American Finance Act.’ ”Learn how to find the best stocks to trade each day in our 70 page E-Book and 90 minute online video for free.