LOS ANGELES – A federal judge has granted preliminary approval of a class-action settlement between First Tech Credit Union and recipients of Deferred Action for Childhood Arrivals (DACA) and other immigrants who were denied full consideration for credit because of their immigration status.
MALDEF (Mexican American Legal Defense and Educational Fund) represents DACA recipients and other immigrants who comprise the settlement class.
“Preliminary approval is a critical step toward recourse for those harmed by discriminatory policies,” said Thomas A. Saenz, MALDEF president and General Counsel. “Of course, such discrimination also has deleterious effects throughout the economy, so we are also pleased that the policy will change as part of this agreement.”
As part of the agreement, approved on Oct. 8, 2024, First Tech has agreed to create a settlement fund of $81,500 to compensate the class of immigrants affected by the challenged practice. As part of the agreement, First Tech will change its policy. The settlement is one of several MALDEF has reached with financial institutions that deny services to DACA recipients and other immigrants based on their status rather than credit-worthiness.
The settlement provides that California class members receive $3,000, while national class members will receive $500 each. First Tech must also pay attorney’s fees and other costs.
“DACA recipients have been historically denied equal participation in consumer markets simply because of their immigration status,” said Eduardo Casas, MALDEF attorney. “Policy changes like those included in this settlement can be life-changing by making vehicle purchases, homeownership, and the pursuit of higher education accessible to DACA recipients through financing. We hope that other lenders will follow suit.”
MALDEF filed the suit in 2023 on behalf of Ismael Rodriguez Perez, a recipient of DACA. Perez was initially approved for a Home Equity Line of Credit (HELOC), but later learned he was denied the loan because he was not a permanent resident. Attorneys argued that First Tech’s policy was a violation of federal and state civil rights law, according to the lawsuit filed in federal court.
“This agreement gave me a sense of justice and relief,” said Perez. “It makes me wonder, however, how many people have been discriminated against without recourse. I am really happy and proud that this can be a great first step to stop discrimination against DACA recipients and inspires us to stand up for ourselves more. As a DACA recipient and STEM professional, I also hope that this can continue to raise awareness regarding DACA in the community and progress more toward equality.”
The suit challenged First Tech’s denial of a loan to Perez as a violation of Section 1981 of the federal Civil Rights Act of 1866 and of California’s Unruh Civil Rights Act, which prohibit discrimination in certain consumer matters. The lawsuit was filed in the U.S. District Court for the Northern District of California.
First Tech Federal Credit Union is an Oregon-based member-owned credit union that manages $17 billion in assets. It serves nearly 650,000 members.
Read the judge’s order HERE.