I received my businesscard statement from Wells Fargo bank today. Printed on the statement is the the following message:

"FOR YOUR ATTENTION Please note a change in terms to your customer agreement to be reflected on the next copy you receive: We can reduce the amount of your credit line without notice to you except in situations where notice is required by law. At our discretion we may place a hold on your available credit up to the amount of your payment whenever a payment is credited to your account."

I called Wells Fargo's National Business Banking Center for clarification as to *exactly* what they are saying here. I spoke with a representative, who had no idea what this meant. She put me on hold while she spoke to her supervisor. The supervisor got on the phone with me and apologized that their business banking center was unaware that this new policy had been printed on the statements. She stated that she, herself, had no idea what it meant, and offered to pursue the question with an "operation's manager" and call me back if I was interested. Why the hell wouldn't a business owner be interested in this?

Are other businesses receiving notices like the above this month?

-- (RUOK@yesiam.com), December 07, 1999

Answers

This is definitely ON topic. Someone sees the possibility of massive deflation (meaning reduction in money supply, having NOTHING to do with price increases). Essentially, it means no new credit, whenever they so decide. (A credit line is not credit -- it is just the amount of credit that you can get -- preauthorized. Just like the max on a credit card. A $10,000 card means you are authorized to go up to $10,000 -- even though the actual credit you may have used is only $2000 for your water filters and toilet paper.)

Got cash? Withdraw early and withdraw often.

-- A (A@AisA.com), December 07, 1999.

A, thank you for your reply. I agree this is most likely VERY on topic. I did not receive the promised callback from Wells Fargo bank to explain their "change in terms". Insisting on an explanation, I have also e-mailed the bank. My company is not a cash business, and our daily operations rely on the availability of a preauthorized credit line, as do most of the vendors and businesses with whom we interact. That a bank would send out a mass mailing to its business customers to alert them that their credit lines may be reduced or eliminated without notice, is a statement with serious consequences. Can businesses really ignore the implications? Can Wells Fargo really expect to maintain its business clientele under such circumstances?

-- (RUOK@yesiam.com), December 07, 1999.

Don't worry everything is fine Clinton said so and I did see his lips move!!!!!

-- Susan Barrett (sue59@bellsouth.net), December 07, 1999.

Expansion of my comment above: Cascading bankruptcies mean credit contraction. This (world) economy is now built on credit money. Everything is loans, credit lines, funny money (bills in your wallet, signifying nothing except an indebtedness).

The 1930s U.S. depression and the Japanese 1990s depression wer caused by debt/credit implosions.

When a company fails, and it has loans outstanding -- the money just vanishes "poof"! The bank can no longer carry the loan as an asset on their books. They then have to call loans or reduce credit so as to lessen future loans to compensate. This means other companies will go belly up. If a whole bunch fail real fast after 2000-01-01, this could happen even faster than the Fed can create magnetic domains oriented the right way. Japan tried to bail out with almost 0% loans and they are still in the soup, about ten years later.

So, your bank reducing (effectively) your credit line means ....

Got cash? Withdraw early and withdraw often.

-- A (A@AisA.com), December 08, 1999.