DACA Discrimination: Legal Challenges Target Financial Institutions Over Loan Denials

by | Jan 29, 2024 | Firm News

A prominent Latino legal and civil rights group, the Mexican American Legal Defense and Educational Fund (MALDEF), has been actively pursuing legal action against financial institutions for allegedly discriminatory practices towards eligible DACA recipients. Over the past seven years, MALDEF has filed ten lawsuits, with the two most recent ones filed last week. The lawsuits claim that financial institutions are denying loans and services to DACA recipients based on their immigration status, a practice that MALDEF argues is unfair and violates civil rights.

DACA, or Deferred Action for Childhood Arrivals, allows nearly 580,000 undocumented young adults, many of whom are Latino, to work and study without the fear of deportation. DACA recipients, armed with employment authorization cards and social security numbers, can apply for various loans, including those for homes and cars. However, the program requires renewal every two years.

The recent lawsuits target Noble Credit Union and a First Tech Federal Credit Union branch in Oregon. The Noble Credit Union case involves a 28-year-old DACA recipient, Noemi Peraza Lopez, who was initially approved for a $35,000 auto loan but was later denied based on the “limited-term” status of her driver’s license. The lawsuit claims that discrimination led Peraza Lopez to seek a less favorable loan elsewhere.

In the case against First Tech Federal Credit Union, MALDEF represents 31-year-old DACA recipient Ismael Rodriguez Perez, who was told he was approved for a home equity loan but was later denied due to his immigration status. The credit union allegedly required Perez to have a green card, a privilege reserved for permanent residents.

These lawsuits are part of MALDEF’s ongoing efforts to challenge financial institutions that discriminate against DACA recipients. Notably, MALDEF previously sued Wells Fargo in 2017, resulting in a settlement that required the bank to pay over $18.7 million to affected DACA recipients and revise its lending policies.

Despite settlements in similar cases involving other institutions, MALDEF continues its legal pursuits to obtain definitive rulings, potentially involving the Supreme Court. The organization aims to address longstanding policies that may contribute to discrimination based on immigration status. Additionally, MALDEF seeks clarity from Congress on the unlawfulness of discrimination against subgroups of immigrants, not limited to DACA recipients.