NEW YORK — The banking unit of Wells Fargo is facing a lawsuit claiming it illegally reduced the size of customers’ home-equity lines of credit.
The suit, which was filed in Illinois, claims Wells Fargo failed to accurately assess the value of customers’ houses before deciding to cut the size of their credit lines.
Home-equity lines of credit are similar to credit cards in that a customer has a credit limit and can continue to borrow money until the limit is reached. The lines of credit are backed by a borrower’s property, whereas credit cards are unsecured.
Michael Hickman filed the lawsuit on behalf of himself and is seeking class-action status. His suit claims the bank’s notice for reducing the lines did not specifically provide a new estimated value for the property or the method used to determine the house’s value.
