Outten & Golden LLP: Wells Fargo Discriminates Against DACA Participants in Auto Lending

New charges are latest in bank’s ‘long history of credit discrimination claims against it,’ lawsuit alleges

Wells Fargo Bank, N.A. illegally denies auto loans to loan-eligible non-U.S. citizens regardless of their creditworthiness, according to a federal lawsuit filed today by Outten & Golden LLP.

Filed in San Francisco on behalf of Eduardo Peña, a resident of Berwyn, Ill., who has had Deferred Action for Childhood Arrivals (DACA) status since 2012, the lawsuit alleges Wells Fargo violated federal laws that prohibit discrimination based on alienage and that require a lender to provide an accurate written explanation for the denial.

According to the lawsuit, “Wells Fargo’s auto loan line of business, as a matter of policy, treats non-United States citizens who reside in the United States and hold [DACA] status as categorically ineligible for auto loans even where they have valid Social Security numbers and federal work authorization and regardless of their creditworthiness and ability to satisfy the bank’s auto loan underwriting criteria.” The lawsuit alleges violations of the Civil Rights Act of 1866 and the Equal Credit Opportunity Act (ECOA).

Mr. Peña was born in Mexico and lives and works in the U.S. lawfully. Employed as a tax manager, he obtained DACA status and a federal work permit in 2012 and has renewed his DACA status three times.  He is among the more than 800,000 individuals approved for DACA status.

In November 2018, the lawsuit asserts, Mr. Peña submitted an online loan application through the Wells Fargo website. After Mr. Peña declared his non-resident alien status and submitted his Social Security card and work permit, Wells Fargo denied his application. Wells Fargo is also accused of harming Mr. Peña’s good credit and violating ECOA by not providing him with an accurate written explanation for the loan denial.

Attorney Michael N. Litrownik, of Outten & Golden LLP, said, “Denying individuals the right to contract for a loan simply because they are not U.S. citizens is discriminatory under federal law. DACA recipients should be treated fairly and evaluated for credit in the same way as U.S. citizens and permanent residents.”

The legal team for Mr. Peña seeks to have the litigation certified as two separate class actions that include:

  • All non-U.S. citizens living in the U.S. that held DACA status when they applied and were rejected for Wells Fargo auto loans between July 16, 2017 and the date of final judgment in the case, and,
  • All non-U.S. citizens living in the U.S. that held DACA status when they applied and were rejected for Wells Fargo auto loans between July 16, 2017 and the date of final judgment in the case who did not receive a written notice of adverse action with accurate statements of the reasons for the loan denials.

Attorney Ossai Miazad, of Outten & Golden LLP, said, “There is no federal or state law or regulation that restricts banks from providing financial products to customers because the customer is an alien. Why Wells Fargo refuses to see creditworthy and loan-eligible DACA recipients as excellent customers makes no business sense.”

The lawsuit asserts that “Wells Fargo has a long history of credit discrimination claims against it. The bank is currently being sued for illegally denying DACA recipients the opportunity to obtain student loans, unsecured credit cards, personal loans, and small business loans. Seven years ago, the bank settled a lending discrimination case brought by the Department of Justice for $175 million. The same year, the bank paid Tennessee towns $432 million to settle lending discrimination claims. More recently, the cities of Oakland, Sacramento, and Philadelphia separately sued the bank for steering African American and Hispanic borrowers into high-cost loans even though they qualified for loans on less onerous terms. The discrimination claims against Wells Fargo have also extended outside the lending realm. Two years ago, the bank paid out $35.5 million to settle a class action lawsuit alleging that it discriminated against African-American financial advisors.”

The case is “Eduardo Peña, et al., v. Wells Fargo Bank, N.A.,” Case No. 19-cv-04065 in the U.S. District Court, Northern District of California, San Francisco Division.

Media Contact: Erin Powers, Powers MediaWorks LLC, for Outten & Golden LLP, at 281.703.6000 or info@powersmediaworks.com.