It’s the end of an era for Wells Fargo & Co., which this week restructured its financial division and said it would cease origination of subprime mortgages.

Wells Fargo (NYSE: WFC) plans to close its 638 Wells Fargo Financial Stores, including 13 in Minnesota, and eliminate 3,800 jobs nationwide. A Wells Fargo spokesperson could not quantify the number of Minnesota employees affected but said that an average of five to six employees work at each “store” location.

The 13 financial stores have operated in nine suburban locations – Burnsville, Coon Rapids, Eden Prairie, Inver Grove Heights, Maple Grove, Maplewood, Plymouth, Roseville and Woodbury – and in the Greater Minnesota cities of Duluth, Mankato, Rochester and St. Cloud.

 “Our network of U.S.-based consumer finance stores, which have historically operated as an independent sales channel from our bank operations, have served customers well for more than 100 years,” said David Kvamme, president of Wells Fargo Financial in a prepared statement. “But the economics of a separate Wells Fargo Financial channel are no longer viable, especially now that our customers have access to the largest banking and mortgage store network in the United States.”

The San Francisco-based bank, the fourth largest in the nation in terms of assets and the largest mortgage lender, has been under attack, along with several other banks, for alleged abuses in its subprime lending practices, particularly in minority communities.

Earlier this spring, the bank settled a lawsuit filed by the NAACP that accused it of steering African-American borrowers into costly subprime mortgages while providing loans with lower fees and interest rates to white borrowers in similar financial circumstances. The cities of Memphis and Baltimore filed similar lawsuits against Wells Fargo that are still pending in federal court.

As part of the settlement with the NAACP, Wells Fargo invited the civil rights organization to review its lending practices and to make recommendations to further improve credit availability to minority borrowers. The bank did not admit any wrongdoing, nor did it pay any financial penalty at the time of the settlement. The NAACP remains in litigation with 14 other financial institutions, including JPMorgan Chase, Citibank and HSBC, over allegations of unfair lending practices and lending discrimination.

Wells Fargo spokesperson Steve Carlson said that the restructuring is not related to the lawsuits but is intended as a cost-savings move following the acquisition of Wachovia in 2008. That acquisition expanded Wells Fargo’s bank network to 6,600 branches and 2,200 home mortgage locations, eliminating the need for a separate network of financial stores.

Carlson said that the company will continue to offer FHA-approved mortgages, auto loans and credit cards at its bank branches and home mortgage stores but will cease origination of subprime mortgage loans that it holds in its own portfolio.  “We will continue to service customers across a broad credit spectrum,” he added.

Less than 2 percent of all Wells Fargo’s real estate loans were originated in Wells Fargo Financial offices in the first quarter of 2010. The company expects the consolidation to result in “increased operating efficiencies, streamlined processes and controls, and a more consistent experience for customers” the company said in a prepared statement.

About 2,800 positions will be eliminated during the next 60 days nationwide, with an additional 1,000 positions likely eliminated over the next 12 months, the company said. The remainder of affected employees will be reassigned to other Wells Fargo businesses.

Restructuring-related pre-tax charges of about $185 million are expected, with $137 million, or $0.02 per common share, recorded in second quarter of 2010. The remaining charges would occur in the second half of the year. Cost savings are expected to offset these charges over 18 months, once implemented, the company said.

Last year, Wells Fargo received $25 billion in TARP (Trouble Asset Relief Program) funds as part of the financial market rescue but has repaid the government, with interest.