LOS ANGELES – A Latino civil rights organization has filed a class-action lawsuit against Kinecta Federal Credit union, alleging it unlawfully denied a loan to a DACA (Deferred Action for Childhood Arrivals) recipient on the basis of his immigration status.
The lawsuit is one of several that have been filed by MALDEF (Mexican American Legal Defense and Educational Fund) against credit unions that have made similar allegations.
The plaintiff in the lawsuit is Rogelio Esqueda of Huntington Park, Calif. According to the lawsuit, Kinecta unlawfully discriminated against Esqueda when it denied him an auto loan because he obtained his Social Security card through DACA.
“Credit unions undermine our economy when they engage in discrimination against immigrants,” Thomas A. Saenz, MALDEF president and general counsel, said in a statement. “Like other similar cases we have pursued to favorable resolution, here we look forward to vindicating the legal rights of DACA recipients to be free of unfair discrimination.”
The Allegation
According to the lawsuit, Kinecta’s action violated Section 1981 of the federal Civil Rights Act of 1866 and the California Unruh Civil Rights Act. Both laws prohibit discrimination based on national origin, citizenship, and immigration status.
“It is apparent that lenders making these decisions do not appreciate the impact of these discriminatory practices on people and their families,” Eduardo Casas, staff attorney with MALDEF, said in a lawsuit. “Lenders should not hinge their decisions on arbitrary internal estimates of how much longer they expect someone to be in this country.”
The lawsuit alleges that on Oct. 5, 2023, Esqueda, 42, applied for a $16,000 auto loan through Kinecta’s website. Although he was not a member, he lived in a zip code that Kinecta serves.
‘Could Not Verify Identity’
“Esqueda received an automated reply telling him his application was being reviewed,” MALDEF said. “The following day, Esqueda received another email indicating that Kinecta could not verify his identity, which was necessary for opening an online account. However, a few hours later, he received an email congratulating him on the approval of his loan.
“Esqueda received a fourth email from a Kinecta representative who worked in the credit union’s Manhattan Beach office,” the MALDEF statement continued. “The email said Esqueda had been pre-approved for the loan with a 6.99% interest rate, which could be lowered if he set up automatic payments through Kinecta. The email listed some requirements for processing the loan, including providing his driver’s license, the signed purchase contract for the car, and a copy of both sides of his social security card. Esqueda supplied the documents but received no response.
Application ‘Rejected’
“A week later, he called the loan representative and was told his application had been rejected because he was not a permanent resident,” the organization stated.
MALDEF further said in its statement that Esqueda’s wife went to the Kinecta branch to get more information and was told the only way Esqueda could get a loan was for him to get an Individual Taxpayer Identification Number (ITIN), which is for people who do not have a social security numbers.
“Esqueda’s wife explained that her husband’s Social Security number was valid, but the Kinecta representative told her the only option was an ITIN,” the MALDEF statement continued. “The Kinecta representative told her that Esqueda could use the ITIN to build credit until he could get a ‘real’ Social Security number. As a DACA recipient, Esqueda has a social security number that authorizes him to work in the U.S. After Esqueda was denied the loan, his credit score dropped. He was eventually able to obtain a car loan, but at a much higher interest.”
‘Sweat & Tears’
“I have always looked forward to purchasing a car through my own sweat and tears,” Esqueda said in a statement distributed by MALDEF. “Despite working hard, I was almost denied this opportunity simply because they judged me for having DACA.”
According to MALDEF, the lawsuit is the 12th it has filed since 2017 challenging the policies of financial institutions that discriminate against DACA recipients.
A copy of the lawsuit is available here.
How to Sign Up For the Best Daily News Email in Credit Unions? (It’s Free!)
Every workday CUToday.info delivers the most comprehensive, freshest daily newsletter with the day’s news headlines, including links to the related articles. The Fresh Today newsletter is the most timely, relevant and widely-read source of news and information in the CU community. And it’s free!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties,
And did we mention it’s free?