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Wells Fargo discriminated against Dreamer by denying auto loan, lawsuit claims

Jul 25, 2019 / News Item / CNN Business — Matt Egan

Eduardo Peña and his wife moved out of Chicago last year to start a family together.

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A Wells Fargo representative told Peña by phone that the loan application had been rejected because his status under the Deferred Action for Childhood Arrivals (DACA) program was set to expire during the loan period, according to a lawsuit Peña filed against the bank this week.

Under DACA, undocumented immigrants who were brought to the United States as children are permitted to legally work for a period of two years, subject to renewal. This group, known as Dreamers, receives Social Security numbers and federal work permits.

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Peña, who was born in Mexico and obtained DACA status around 2012, filed a lawsuit against Wells Fargo earlier this week arguing that the bank's alleged policy of denying DACA recipients credit is "discriminatory and unlawful." The lawsuit, filed in United States District Court in Northern California, is seeking class-action status.

Wells Fargo, which is based in California, has not responded in court yet.

In a statement provided after this article was published, Wells Fargo said that individuals with DACA status do not meet its auto underwriting policy. For Dreamers, the bank said it offers "secondary financial products," including a secured credit card and secured personal loan.

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The lawsuit was filed by a law firm that launched a separate legal fight against Wells Fargo two-and-a-half years ago for allegedly failing to provide student loans, credit cards, personal and small business loans to Dreamers. A judge decided to exclude auto loans as well as mortgage loans from that earlier case, which is still pending. Wells Fargo has argued in that case that a lender may consider a borrower's immigration status in deciding whether to extend credit.

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The lawsuit is seeking actual and punitive damages from Wells Fargo. It argues that Wells Fargo "intentionally discriminated" against Peña by denying him an auto loan, conducting a hard credit check that hurt his credit score and failing to give him a written notice with an accurate reason for why his loan was rejected. (His credit score at the time of his application was 748, according to the complaint.)

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The complaint argues that the alleged discrimination is a violation of the Civil Rights Act of 1866, the post-Civil War law passed by Congress aimed at protecting the rights of freed slaves.

The lawsuit further claims that the apparent failure to provide an accurate written explanation is a violation of the Equal Credit Opportunity Act, a federal law that prohibits lenders from discrimination on the basis of race, religion, sex, marital status, age and national origin.

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What about other banks?

Michael Litrownik, one of the lead attorneys representing Peña, suggested legal action could eventually be brought against other banks that deny Dreamers access to credit.

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    "We would like to break down barriers at every bank in the industry, if we can. We're hoping this will lead to change in the industry," Litrownik told CNN Business.

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