SAN FRANCISCO – A Latino civil rights group is expanding a lawsuit filed by DACA recipients challenging a national bank’s lending policies to a federal class action, according to documents filed in federal court today.
MALDEF (Mexican American Legal Defense and Educational Fund) amended its complaint against Discover Bank five months after it filed a suit in California state court challenging the bank’s denial of student loans and other related services to applicants who are not U.S. citizens or permanent residents.
The class is represented by two people who are protected from removal and authorized to work under Deferred Action for Childhood Arrivals (DACA). The amended complaint expands the suit to include class members who reside in states other than California, and adds a claim that Discover Bank’s policy of assessing loan applicants based solely on their immigration status, instead of their credit-worthiness, violates federal law.
“Although California law is even clearer about the violation, federal civil rights laws also protect the right of DACA recipients to have their loan applications assessed fairly and not have them rejected solely because they received DACA,” said Thomas A. Saenz, MALDEF president and general counsel. “These hard-working young Americans deserve access to capital like others seeking to improve their prospects through higher education.”
Initially filed in July as a statewide class-action suit, the latest complaint seeks to include any non-citizens and non-permanent-residents in the United States who might have been denied services by Discover Bank because of immigration status. The amended complaint alleges that Discover Bank violated federal and state civil rights laws, including 42 U.S.C. § 1981 and the California Unruh Civil Rights Act, that prohibit discrimination based on alienage and immigration status.
The two DACA recipients representing the class reside in San Francisco and Los Angeles.
In 2010, Iliana Perez secured a $15,000 student loan with The Student Loan Corporation, which is now a subsidiary of Discover Bank. When she applied to refinance the loan at a lower rate with Discover Bank in 2018, the company informed her it would not be able to grant her request because of her immigration status, according to the lawsuit.
Flavio Guzman Magaña applied for a $35,500 loan to attend grad school in 2016. Because he is a DACA recipient, Discover Bank required him to apply for his loan as an international student and with a U.S. citizen or permanent resident co-signer, a condition that is not required of U.S. citizen or permanent resident applicants.
In both cases, Discover Bank rejected each plaintiff’s application based on their immigration status and not on their credit-worthiness, according to the complaint.
“We’re expanding the class to protect the rights of applicants nationwide who were denied services on the basis of their immigration status because we believe this practice goes beyond California’s borders,” said MALDEF attorney Deylin Thrift-Viveros. “A change in Discover Bank’s nationwide policies will remove one of the many obstacles immigrant students face in acquiring financial aid to support their education.”
Read the amended complaint HERE.