Wells Fargo Settles Class Action Over Its Lending Policies for Immigrants

In this May 17, 2018 file photo, the logo for Wells Fargo appears above a trading post on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

SAN FRANCISCO (CN) — Under a class action settlement approved Friday by a federal judge, Wells Fargo will change its lending policies to extend student loans and other lines of credit to DACA recipients on the same terms and conditions as U.S. citizens.

It will also pay $18.7 million to compensate DACA recipients who were turned down for student loans, credit cards, mortgages and other loans because they did not meet Wells Fargo’s citizen or immigration status requirements. 

The award will be divided into payments of $4,750,000 to $13,100,000, depending on the number of people who file claims, and the settlement says at least 50,000 DACA recipients are eligible for payments.

Lead plaintiff Mitzie Perez is one of some 800,000 young people who was granted protection from deportation through Deferred Action for Childhood Arrivals. 

The program created through executive order by President Barack Obama in 2012 protects qualified applicants from deportation if they were brought here as children and have clean records. They may apply for and be granted work permits good for two years, which can be renewed.

Perez sued Wells Fargo in 2017 while she was a junior at the University of California, Riverside, after she was denied a student loan through its website. Perez says the denial happened after she answered a question about her citizenship status, a violation of equal rights to enforce contracts under 42 U.S. Code § 1981.

Wells Fargo said through a spokesman that it was pleased that U.S. District Judge Maxine Chesney approved the agreement, pointing to its announcement in March about plans to expand DACA recipients’ access to credit.

Chesney also approved on Friday a $1.185 million settlement between Wells Fargo and a class of DACA recipients excluded from receiving auto loans. The agreement estimates that roughly 400 people could receive payments between $280,000 and $630,000, depending on the number who file.

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