Wells Fargo Bank is caught in the crosshairs of a proposed class action lawsuit filed by a man who claims the bank unlawfully refuses to approve auto loans for non-U.S. citizens who hold Deferred Action for Childhood Arrivals (DACA) status.
October 21, 2021 – Wells Fargo DACA Auto Loan Class Actions Settled for $19+ Million
On January 8, 2021, United States District Judge Maxine Chesney granted final approval to two settlements that will put an end to the proposed class action detailed on this page and a similar suit filed in 2017.
Law360 reports that the nationwide and California-specific settlements require Wells Fargo to extend consumer loans and other unsecured credit to Deferred Action for Childhood Arrivals (DACA) recipients, or “Dreamers,” on the same terms and conditions as United States citizens. Wells Fargo must also provide cash payments to DACA recipients who tried to borrow from the bank in recent years but were denied.
Wells Fargo may be responsible for paying up to $13.73 million to individuals covered by the settlements, depending on the number of claims submitted. DACA recipients in California could receive up to $2,500 per claim, while those covered by the nationwide deal could receive either $100 or $300, Law360 states.
Wells Fargo Bank is caught in the crosshairs of a proposed class action lawsuit filed by a man who claims the bank unlawfully refuses to approve auto loans for non-U.S. citizens who hold Deferred Action for Childhood Arrivals (DACA) status. According to the lawsuit, Wells Fargo categorically denies loans for DACA applicants regardless of their creditworthiness or ability to meet the bank’s other criteria for auto loan approval.
The plaintiff, who the suit says was born in Mexico and obtained DACA status in 2012, attempted to apply for an auto loan with Wells Fargo in November 2018, according to the lawsuit. After reviewing his Social Security card and work authorization, a Wells Fargo representative allegedly informed the man that he was ineligible for the loan because his DACA status would expire during the loan period. The plaintiff says he explained that his status would be renewed and that his work authorization would last for two years, yet the representative apparently insisted that he could not be approved.
The lawsuit argues that the defendant’s categorical denial of loans to DACA status individuals is not based in law and instead violates the Civil Rights Act of 1866.
“There is no federal or state law or regulation that restricts banks from providing financial products to customers because the customer is an alien,” the complaint states. “Under federal law, alienage is merely one factor among many used to verify enough information to confirm the true identity of the customer.”
The plaintiff alleges that Wells Fargo failed to assess whether he met the bank’s other criteria for taking out a loan and instead denied him merely because he is not a U.S. citizen. Further, the man claims the bank violated the Equal Credit Opportunity Act by refusing to send him a written explanation of his auto loan denial.
According to the plaintiff, the bank’s alleged discrimination is not limited to auto loans. The man claims he is similarly—and unlawfully—ineligible for student loans, an unsecured credit card, a personal loan, and a small business loan at Wells Fargo due to his status under DACA.