After Mitzie Perez filled out a preliminary form online to inquire about a student loan from Wells Fargo last summer, a message flashed across the screen saying the bank had no options for her. “This could be due to the school you selected, your field of study, and/or your citizenship status,” the bank’s website said.
The third-year bachelor’s student in gender and sexuality studies at the University of California, Riverside, didn’t think her citizenship status would be a problem. Though she’s undocumented, in 2012 she received work authorization under the Deferred Action for Childhood Arrivals program. That program shields undocumented immigrants who arrived as youths from deportation and allows them to work legally.
Curious, Perez hit the back button on her browser and changed her answer on one of the preliminary questions to say she was a permanent resident. After she resubmit her application, Wells Fargo allegedly offered her a loan option she could apply for.
“I didn’t expect it,” Perez told The Huffington Post. “I’ve been approved for credit cards. It was weird to me that a loan wouldn’t be approved, but creditors would provide me that support.”
A class action lawsuit filed in U.S. District Court in Northern California says rejecting her application based on immigration status violates both federal and state law.
The lawsuit could have sweeping implications if successful. It asks the court to create a class of people affected by the Wells Fargo policy that would include not only people like Perez, with DACA, but also any financially qualified person who applied for a loan and was denied for lack of U.S. citizenship since 2013.
The Mexican American Legal Defense and Education Fund brought the lawsuit on behalf of Perez and the California chapter of the League of United Latin American Citizens, whose membership includes DACA recipients affected by the bank’s loan policies.
“We don’t think Wells Fargo was unique, but it was the case that came to us first,” MALDEF President Thomas Saenz told HuffPost. “Our hope is that if we can resolve the issue with Wells Fargo, perhaps the other banks seeing what we’re doing will change their policy.”
Wells Fargo spokesman Jason Vasquez pointed out that the bank only accounts for roughly 1 percent of total student loans and that its policies are in line with the U.S. Department of Education, which also does not loan to DACA recipients. The bank offers two products for which DACA recipients qualify ― a credit card and secured personal loan.
“While we respect the important role that the California League of United Latino Citizens and the Mexican American Legal Defense and Educational Fund play in support of the community, we are disappointed they filed a lawsuit rather than work with us on solutions to help people realize their goals of higher education,” Vasquez wrote in an email to HuffPost. “Wells Fargo understands the dream of pursuing higher education and we remain focused on our responsible lending practices to assist temporary and permanent residents and U.S. citizens in obtaining student financing.”
When assessing whether to offer a loan, a financial institution is only supposed to establish the applicant’s true identity and the risk the applicant will default, the lawsuit says. The lawsuit contends that using an applicant’s immigration status as a factor when considering whether to extend a loan violates the U.S. Civil Rights Act of 1866, which allows anyone in the country to enter into contracts.
“It’s discriminatory,” Saenz said. “The bottom line is that banks are supposed to make loans based on the assessment of risk. ... A person’s immigration status is simply not relevant.”
The lawsuit alleges the Wells Fargo policy also violates a California state law protecting against discrimination and another that prohibits unfair business practices.
Barring Perez from applying for a private loan added one more financial hurdle to her path toward a college degree. The DACA program provides some protection from deportation and allows her to work legally, but she’s still not allowed to apply for federal student aid ― the largest pool of financial assistance that people use to pay for a college education.
Already indebted, she charged her tuition on credit cards and works a schedule that includes two full days from 9 a.m. to 9 p.m. in class and the rest of the week working as a community organizer. She also works on weekends ― not just to service her debt, but to help support her family. “I’m trying to be a good student,” Perez said. “I’m trying to give back to my community and be involved.”
The lawsuit seeks damages on her behalf and for the bank to end its policies of weighing immigration status as part of its loan applications. If the class were granted, it could affect many more people in similar situations.
“We deserve a chance to get a student loan,” Perez said. “We want to be a part of this economy. We want to do well in school. But sometimes we’re not getting the support we need.”