Marika Hamilton, 38, is a single mother of two daughters and the hard-working owner of a Jimmy John’s Gourmet Sandwiches shop in Fort Wayne, Ind.
One day, she went to World Market to buy furniture on a 90-day-same-as-cash deal from GE Money.
She scheduled payment in advance through her online account at Wells Fargo Bank NA to avoid the hefty penalties that come with such offers.
“I am fanatical about paying my bills on time,” she said.
The payment, however, turned up late because of a glitch in Wells Fargo’s system.
She dialed through the telephone bureaucracies of Wells Fargo and GE Money to straighten it out.
She says Wells Fargo ultimately responded by freezing a $103,600 home equity line of credit on her $148,000 home.
Three major credit reporting agencies currently list Hamilton’s credit scores at 736, 745 and 746. Despite these golden numbers, Well Fargo told her it was freezing her home equity line “due to derogatory credit.”
The only “derogatory” thing on her credit report was a disputed $25 late fee at GE Capital. Hamilton couldn’t believe it: One disputed late fee and a six-figure line of credit goes poof?
Hamilton said when she called Wells Fargo yet again, its representatives responded with threats.
“I was told that the harder I pushed, the more scrutiny my accounts would be put under, and that my credit cards would be next I was about in tears. And was told, ‘You better start carrying cash,'” she said.
Mary Berg, a Wells Fargo spokeswoman, declined comment, citing pending litigation.
Hamilton had used her life savings to buy her home and didn’t have another mortgage. She took out the home equity line in August 2008, as a cushion against an unpredictable economy, but she never needed to tap it.
Hamilton makes ends meet making sub sandwiches for working people. Sales at her Jimmy John’s, which has 22 employees, are steady enough despite shutdowns at the local General Motors plant.
“We’re doing OK,” she said. “We’re holding our own. I don’t have any choice but to keep on going.”
She would vent frustrations to friends and family.
“They’d say, ‘There’s no way a bank would do that. There must be something more.’ It was just so unbelievable. I was kind of embarrassed about it.”
One day, a friend gave her a copy of a column I had written in August about another Wells Fargo customer, Michael Hickman, a commodities broker in Westmont, Ill.
Hickman is the lead plaintiff on a federal lawsuit that claims Wells Fargo used questionable automated valuation models to indiscriminately slash home equity lines of credit.
Hickman gave Hamilton the phone number of his attorney, and now she’s the lead plaintiff on a class-action lawsuit, too.
Her federal complaint, filed last month in the Northern District of California, claims the bank is fraudulently using false pretenses to cut credit lines so it can limit its exposure to a dicey real-estate market.
“I was just reaching out,” Hamilton said. “I wasn’t looking to sue anybody.”
But Wells Fargo has received $25 billion from taxpayers. Shouldn’t it be doing everything it can to help taxpaying customers through difficult times? Particularly those who’ve played by the rules and have 700 credit scores?
It’s not like Jimmy John’s would be getting a federal bailout if the sub business suddenly sank.
“It’s cut as many borrowers as you can,” said Hamilton’s attorney, Steven Lezell of KamberEdelson LLC in Chicago. “They don’t want to lend out money. They just want to take it from taxpayers.”
Hamilton just wants access to her hard-earned home equity back.
“I have been through a lot dealing with Wells Fargo,” she said. “All I want to do is raise my kids, run my business and meet my obligations. This case isn’t about me. This is about an entity so huge and so arrogant that they don’t feel bound by federal regulations. They are willing to bend the rules and take their chances.”
Al Lewis: al.lewis@dowjones.com or 212-416-2617. Read Lewis’ blog at .
