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Wells Fargo Settles Lawsuit Over Denying DACA Participants Loans, Cards

Wells Fargo Bank will make loans and credit cards available to young, undocumented immigrants in the DACA program — as long as it lasts — and pay up to $19.6 million to settle a lawsuit over its former policy, advocates for the immigrants announced Wednesday.

The bank was accused in a 2017 lawsuit of violating federal and state laws by denying mortgage and consumer loans and credit cards to participants in Deferred Action for Childhood Arrivals, a program established by President Barack Obama in 2012.

DACA allows immigrants who entered the United States without documentation before age 16, who have attended school or served in the armed forces, and have no serious criminal record to remain in the country and obtain renewable two-year work permits.

President Trump has ordered the elimination of DACA and is awaiting a Supreme Court ruling on his authority to do so. He halted new enrollment in the program in September 2017, but has allowed previous participants to renew their enrollment.

The Wells Fargo settlement covers participants in DACA as long as it remains in effect. If Trump is allowed to terminate the program, Wells Fargo will no longer be required to offer credit to former participants, but must still compensate them for past denials of credit, said Michael Litrownik, a lawyer for the plaintiffs. He said at least 30,000 customers nationwide, and perhaps many more, were denied loans because of their immigration status.

“This settlement will significantly expand DACA recipients’ ability to obtain the credit they need to finance their education, small businesses and homes, and meet other important financial needs,” Litrownik said. Attorneys from the Mexican American Legal Defense and Educational Fund also participated in the case.

Wells Fargo announced in March, during settlement negotiations, that it would extend credit to DACA recipients. For participants who were denied credit under the former policy, the settlement provides up to $2,500 for each denial to a resident of California, and $100 to $300 for denials to residents of other states. The bank will also pay up to $5.5 million to the plaintiffs’ lawyers for fees and costs of the lawsuit, Litrownik said.

In defense of its former policy, Wells Fargo cited a 1976 federal law, the Equal Credit Opportunity Act, which prohibits discrimination in lending based on race, sex, religion or national origin but does not mention citizenship.

But U.S. District Judge Maxine Chesney of San Francisco refused to dismiss the suit in 2017 and cited an 1870 federal law — enacted mainly to protect Chinese immigrants — that required businesses such as lenders to grant equal contract rights to “all persons within the jurisdiction of the United States,” including non-citizens.

For California residents, Chesney said, the Unruh Civil Rights Act requires businesses to provide equal treatment to all customers, regardless of their immigration status.

via Bob Egelko - San Francisco Chronicle

#wellsfargo #mortgage #DACA

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