Was Fresno woman denied a loan over her immigration status? What lawsuit claims

A Latino civil rights organization has filed a lawsuit against a Fresno-based credit union, arguing it denied a loan to an individual based on her immigration status.

The class action complaint, filed Friday in Fresno County Superior Court, alleges Noble Credit Union discriminated against Noemi Peraza Lopez when it denied her an auto loan based on her status as a Deferred Action for Childhood Arrival recipient rather than her credit worthiness.

The Mexican American Legal Defense and Educational Fund, which filed the suit, argues that the credit union’s “limited and arbitrary immigration-status requirements” violate state antidiscrimination laws.

“By design, credit unions are supposed to provide more accessible financial products to their members,” said Thomas Saenz, MALDEF President and General Counsel. “Anti-immigrant bias and unlawful discrimination are antithetical to the mission of any credit union.”

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The lawsuit alleges Peraza Lopez’s limited-term driver’s license — a type of California driver’s license that DACA recipients are eligible for — was the reason for the loan denial.

Since 2012, DACA recipients have been eligible for driver’s licenses and identification cards. In California, driver’s licenses or identification cards are considered “limited term” if someone’s birth date and legal presence (BD/LP) documents expire in less than 5 years, according to the Department of Motor Vehicles. DACA has to be renewed every two years.

“I was treated unjustly, and discriminated against,” said Peraza Lopez in a press release. “It’s 2024, and we (DACA recipients) are still getting treated unfairly. We help with the economy, yet are still denied opportunities for growth. When will it end?”

According to the U.S. Citizenship and Immigration Services, there were about 4,260 DACA recipients in Fresno, 1,670 in Merced and 2,590 in Modesto as of September. Statewide, there are an estimated 154,000 California residents with DACA out of a total of 545,000 nationwide.

It’s not immediately clear how Noble Credit Union factors immigration status into its loan approval decisions, or how many Central Valley DACA recipients might have experienced similar loan denials.

Noble Credit Union’s Chief Marketing Officer Keri Bennitt didn’t respond to The Bee’s specific questions about the allegations or their loan decision-making process. Bennitt said in an email statement to The Bee that they’re aware of the lawsuit but have not yet been served with the complaint and “are not in a position to provide further comment.”

“In our experience... it’s not an isolated experience,” MALDEF Staff Attorney Luis Lozada, co-counsel in the lawsuit, told The Bee on Tuesday. “It’s a policy.”

A case management conference is scheduled for May 1, 2024.

Federal law unclear on immigration and loans

Peraza Lopez, 28, works at a bank as a cash management representative. She was originally born in Sinaloa, Mexico, but was brought over to the U.S. at three months old. Peraza Lopez has been a DACA recipient for a decade and is authorized to work in the United States, and she has a Social Security Number.

In July 2023 Peraza Lopez applied for a $35,865.30 auto loan with Noble Credit Union, with a U.S. citizen as a cosigner on the loan, according to the press release. A $35,000 loan was approved the next day.

About five days later, a Noble loan representative sent a message telling her that “[Noble] cannot grant you credit at this time” without further explanation for the denial, the lawsuit states.

Upon further inquiry, a Noble representative told Peraza Lopez that her loan was denied because her driver’s license is for “limited-term.” Her license has an expiration date of July 26, 2027, according to the lawsuit.

On Sept. 7, the credit union sent a letter informing Peraza Lopez and her co-signer that Noble is “unable to offer you credit on the terms that you requested” and that it does not “grant credit to any applicants on the terms and conditions you requested.”

She was later approved for a loan by a different bank offering a higher interest rate.

According to the Code of Federal Regulations, a creditor may consider the applicant’s immigration status or status as a permanent resident of the United States “to ascertain the creditor’s rights and remedies regarding repayment.”

But the Consumer Financial Protection Bureau and Department of Justice issued a joint statement in October saying that over-relying on immigration status in the credit-decision process “may run afoul of ECOA’s (Equal Credit Opportunity Act’s) anti-discrimination provisions and could also violate other laws.”

MALDEF says this lawsuit is the 10th they have filed since 2017 challenging the policies of financial institutions that discriminate against DACA recipients. Saenz of MALDEF told NBC News they are pursuing these cases to “get a definitive ruling” from the Supreme Court, because federal laws are not very clear when it comes to issues of discrimination based on immigration status or against subgroups of immigrants.

Jesus Martinez, executive director of the nonprofit Central Valley Immigrant Integration Collaborative, voiced his support for the lawsuit and said local institutions need more inclusive policies for immigrants. In Fresno County, the estimated purchasing power of immigrants is $4.4 billion, Martinez noted, citing data from the bipartisan research and advocacy organization New American Economy.

“There is no room for discriminatory practices in a place where the regional economy relies so much on the contributions of immigrants,” he said.

Noble Credit Union

Noble Credit Union is a member-owned credit union based in the Fresno branch with locations in Clovis, Selma, and Madera.

Noble was founded in 1941 as the Fresno County Employees Credit Union, and in the 1990s converted to a federally chartered credit union under the name Fresno County Federal Credit Union, according to their website. In 2017, the name was again changed to Noble Credit Union, a name that it says reflects how the institution treats its members “with kindness, dignity and honor.”

According to the National Credit Union Administration, a government agency responsible for regulating federal credit unions, Noble has over 113,265 members and $1.15 billion in assets.