PHOENIX— A federal judge has granted preliminary approval of a class-action settlement between OneAZ Credit Union and recipients of Deferred Action for Childhood Arrivals (DACA) and other immigrants who allege they were denied loans and financial services based on their immigration status rather than their ability to repay.
MALDEF (Mexican American Legal Defense and Educational Fund) and Arizona attorney Daniel Ortega of Ortega Law Firm filed the suit on behalf of Deyra Pamela Carranza Aguilar, of Phoenix, a DACA recipient, and other immigrants who comprise the settlement class.
“Non-discrimination is an essential aspect of any thriving economy,” said Thomas A. Saenz, MALDEF president and general counsel. “This agreement helps to ensure that immigrants do not face discrimination in accessing credit and other financial tools in the future.”
As part of the settlement agreement, which received preliminary approval on September 9, OneAZ Credit Union has agreed to establish a $100,000 settlement fund. The settlement includes compensation for the plaintiff, attorneys' fees and costs, and a $63,500.16 fund to compensate the class of immigrants affected by the challenged practice. OneAZ has also ended the challenged practice and agreed that it will not deny financial products to, or discourage applications from, otherwise qualified applicants solely on the basis of alienage.
“We are pleased to have reached a settlement that recognizes the limitations of considering immigration status or closely related proxies in assessing credit-worthiness,” said Eduardo Casas, MALDEF staff attorney. “Immigrants are an integral part of our economy, and parity in access to financial institutions will enable their continued pursuit of America’s promise.”
In October 2022, Aguilar visited a Flagstaff branch of OneAZ to ask about applying to refinance a $17,000 car loan. Aguilar told a representative there that she had previously been turned down for refinancing because she is a DACA recipient. According to the lawsuit, Aguilar wanted to find out whether OneAZ gave loans to DACA holders. After checking with a manager, the representative told Aguilar that she would “probably be denied” since DACA required renewal every two years. Hoping the representative would reconsider, Aguilar explained that she was employed – DACA recipients can lawfully work in the United States – and had a good income and credit rating. Instead, the representative reiterated that he expected her application to be denied because of her status and took no further action on her request.
The suit challenged OneAZ’s denial of a loan as a violation of Section 1981 of the federal Civil Rights Act of 1866, which prohibits discrimination in contracting based on race, color, ethnicity, or alienage.
The lawsuit was filed in the U.S. District Court, District of Arizona.
OneAZ is a member-owned credit union with $3.4 billion in assets. It serves over 200,000 members across Arizona and offers savings and checking accounts as well as credit cards, mortgages, consumer loans, and other financial services.
The settlement is one of more than a dozen MALDEF has reached with financial institutions that deny services to DACA recipients and other immigrants because of their immigration status rather than their creditworthiness.