Wells Fargo Must Face Immigrant Credit Discrimination Case

A California federal judge on Thursday allowed a proposed class of authorized immigrants allegedly denied the opportunity to apply for credit to bring a lending discrimination case against Wells Fargo & Co., asserting that they had standing to sue under a federal statute she interpreted as broadly prohibiting any kind of discrimination against credit applicants.

District Judge Maxine Chesney determined that the putative class — which includes immigrants with work authorization under the Obama administration’s Deferred Action for Childhood Arrivals program — brought valid claims under the Equal Credit Opportunity Act and California state law prohibiting unfair competition and discrimination against individuals on the basis of immigration status. The court rejected Wells Fargo’s attempt to toss the entire case, but the judge did grant its petition to dismiss claims with regard to immigrants who failed to prove injury as a result of unfair competition.

“The court finds Congress did not intend to authorize creditors to discriminate on the basis of alienage or otherwise to remove protections against discrimination afforded under other statutes,” the decision said.

The immigrants claimed that Wells Fargo denied their applications for credit on the basis that they did not meet the bank’s citizenship status requirements mandating that applicants must be citizens or permanent residents with citizen co-signers.

The Mexican American Legal Defense and Education Fund, which is representing the immigrants, said in a statement Friday that one plaintiff, a third-year undergraduate at the University of California, had obtained a Social Security number and work permit through DACA, which allows immigrants who were brought to the U.S. as children to live and work in the U.S. lawfully. But when she sought a student loan at Wells Fargo in August 2016, the online application required disclosure of citizenship status, and she was rejected based on her response that she was not a U.S. citizen or permanent resident.
                                      *           *          *
The district court … asserted Thursday that Wells Fargo was merely seeking to “avoid the proscriptions of [the act] by relying on the absence of protections for aliens.” It instead interpreted the statute as broadly prohibiting any kind of discrimination based on legislative history and analysis of Congress’ intent in enacting the ECOA.

“This decision is an important affirmation that, when making credit decisions, private banks cannot ignore their legal obligations not to discriminate based on citizenship or immigration status,” David Lopez of Outten & Golden LLP, counsel for the immigrants, said in a statement Friday. “Noncitizens should be evaluated on the same terms and conditions as U.S. citizens when accessing credit for education or living expenses.”

Wells Fargo had also argued that the immigrants could not bring claims under California’s Unruh Civil Rights Act, which prevents businesses from discriminating against individuals on the basis of immigration status, asserting that its provisions conflict with the ECOA. Judge Chesney disagreed, given that she had found the immigrants’ claims valid under the ECOA.
                                      *           *          *
Additionally, Wells Fargo asserted that certain putative class members did not have standing under California unfair competition law because they had not explained how they were materially injured by the bank’s alleged violations of the statute. The court granted Wells Fargo’s petition to dismiss those claims but allowed the immigrants the opportunity to file an amended complaint to address deficiencies in their original explanation.

“Wells Fargo should cease defending the indefensible,” said Thomas A. Saenz, general counsel for the Mexican American Legal Defense and Education Fund, in a statement Friday. “Refusing to even consider loan applications from certain immigrants is odd behavior for a bank looking to build its business; this anti-immigrant discrimination is scandalous.”

The immigrants are represented by Jahan C. SagafiAdam T. KleinNantiya RuanOssai Miazad and David Lopez of Outten & Golden LLP and Thomas Andrew Saenz and Victor Viramontes of the Mexican American Legal Defense and Education Fund.
                                      *           *          *
The case is Mitzie Perez el al. v. Wells Fargo & Co. et al., case number 3:17-cv-00454 in the U.S. District Court for the Northern District of California.