Nothing says you are looking out for the consumer like being a big bank that suddenly decides to cut the lines of credit for every one of its personal borrowers in the United States—a move the bank acknowledges could have a negative impact on those who have used their credit.

In a statement today, Wells Fargo acknowledged the situation and noted it was a difficult decision. While they knew it would harm the credit of many blameless Americans, it still seemed worthwhile for Wells Fargo to do it. From CNBC:

After publication of this article, a Wells Fargo spokesman gave additional remarks: “We realize change can be inconvenient, especially when customer credit may be impacted,” the bank said, adding that it was “committed to helping each customer find a credit solution that fits their needs.”

Credit scoring bureaus tend to score credit users (i.e. average Americans) by using many factors, one of which is the length of time they have held good credit. Closing accounts or holding accounts for limited times may have a negative impact on your credit report, but don’t worry, Wells Fargo is working on … well, they aren’t sure, CNBC continues.

The move is a strange one given the banking industry’s need to boost loan growth.  

The problem they have created shows us everything that is wrong with the credit rating system, something which we discovered prior thanks to the CFPB, as The Atlantic points out:

In their investigation, the Bureau found that the two agencies had been misrepresenting the scores provided to consumers, telling them that the score reports they received were the same reports that lenders and businesses received, when, in fact, they were not. The investigation also found problems with the way the agencies advertised their products, using promotions that suggested that their credit reports were either free or cost only $1. According to the CFPB the agencies did not properly disclose that after a trial of seven to 30 days, individuals would be enrolled in a full-price subscription, which could total $16 or more per month. The Bureau also found Equifax to be in violation of the Fair Credit Reporting Act, which states that the agencies must provide one free report every 12 months made available at a central site. Before viewing their free report, consumers were forced to view advertisements for Equifax, which is prohibited by law.

More Americans dumped into a system that is likely to drag their score down, through no fault of their own—just a decision by Wells Fargo. As a result, they may suffer other penalties, like higher interest rates, difficulty getting a loan, or buying a house. 

Now is the time for a real push toward alternative credit scoring.