SAN FRANCISCO (CN) — A federal judge on Wednesday rejected Wells Fargo's argument that it can't be sued for making non-citizens apply for checking accounts in person while it lets U.S. citizens apply online.
Wells Fargo had asked U.S. District Judge James Donato to dismiss a claim related to online enrollment for new checking accounts in a lawsuit brought by two Russian nationals.
Alexandr Maystrenko and Ekaterina Maistrenko, a married couple from Russia who are living in California while their asylum applications are under review, claim the bank denied their online requests for a credit card, personal loan and checking account based on their immigration status.
They claim Wells Fargo maintains a policy of limiting those services to U.S. citizens and legal permanent residents in violation of state and federal civil rights laws.
When Maystrenko applied online for a checking account in San Diego last year, he received a response from the bank stating, “We apologize, but at this time we cannot open accounts online for non-resident citizens aliens. For more information, or to apply in person, visit your local Wells Fargo branch.”
Wells Fargo argued that because Maystrenko never tried to apply in person, that specific claim should be dismissed from the suit.
The plaintiffs called that argument “absurd,” insisting that California’s civil rights law, the Unruh Act, does not permit companies to exclude other protected groups — such as racial minorities or females — from a more convenient application process.
“Plaintiffs maintain it would be absurd and be contrary to the text and purpose of the Unruh Act to require an African-American consumer, a gay or lesbian consumer, or a disabled person, after a bank’s website application process excluded them from a bank’s financial service based on their race, sexual orientation, or disability, would be required to travel to a bank’s branch and apply in person for that bank’s financial service in order to have standing for an Unruh Act claim,” the plaintiffs’ lawyer wrote in an opposition brief.
To support its argument, Wells Fargo relied on a ruling issued by U.S. District Judge Jon Tigar in Oakland last year dismissing a claim in a similar lawsuit, Chattopadhyay v. BBVA USA. Tigar wrote that no law or authority gave the plaintiffs in that case “a legally protected interest" in opening an account online rather than in person.
But on Oct. 24, a three-judge Ninth Circuit panel reversed that decision, finding the plaintiffs adequately alleged a concrete injury and therefore have standing to sue. The unpublished opinion found the bank’s practice of allowing U.S. citizens to apply for checking accounts online but denying immigrants that benefit gave rise to a plausible violation of civil rights laws.
“The fact that Plaintiffs would have ultimately obtained the same checking account given to U.S. citizens does not vitiate the alleged discriminatory injury: that BBVA imposes on non-U.S. citizens a requirement to apply in person that it does not impose on others,” the three-judge panel wrote in a five-page decision.
In a ruling issued Wednesday, Donato acknowledged the unpublished opinion establishes no precedent, but he found the three-judge panel’s reasoning persuasive nonetheless. The judge had been waiting for the appeals court to rule on that dispute since last spring.
“The results are now in, and the circuit court reversed Chattopadhyay on the standing point,” Donato wrote in a six-page ruling Wednesday. “In pertinent part, the circuit court concluded that Article III standing is established when a plaintiff alleges that a bank allows United States citizens to apply for accounts and services online, but requires noncitizens to appear in-person at a branch.”
Wells Fargo suggested that it may have denied Maystrenko’s application for a different reason — such as a lack of creditworthiness — but Donato said that is a factual dispute that must be resolved at a later stage of litigation.
Wells Fargo had also argued that Equal Credit Opportunity Act regulations give banks the right to consider an applicant’s immigration status when deciding whether to extend credit. Judge Donato found those regulations irrelevant to the claim at issue — whether Wells Fargo has a policy of denying banking services in whole or in part based on immigration status.
The bank further suggested that legitimate business reasons justify its policies regarding banking services for non-citizens. Donato found those considerations only apply when a California civil rights claim involves a category not specifically protected under the statute or added by judicial precedent.
“Here, citizenship and immigration status are enumerated in the Unruh Act,” Donato wrote. “To the extent that Wells Fargo invokes 'public policy' reasons for dismissal of the Unruh Act claims, it offers no policy that might reasonably embrace discrimination in banking services based on alienage.”
The Maystrenkos’ lawyer, Alfred Rava of San Diego, welcomed the judge's ruling.
“My clients and I are very pleased with the district court’s well-reasoned order denying Wells Fargo’s motions to dismiss," Rava said in an emailed statement.
A Wells Fargo spokesperson declined to comment on the ruling but said the bank "is committed to serving all its customers regardless of their nationality or citizenship status.”
Last year, Wells Fargo paid $18.7 million to settle a lawsuit claiming it illegally denied student loans and other lines of credit to Deferred Action for Childhood Arrival (DACA) recipients based on their immigration status.
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