LOS ANGELES, CA (MPG) – A federal judge has granted preliminary approval of a class-action settlement between Kinecta 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.

“Credit unions are key institutions for building economic prosperity stability in local communities, so it is critical that their services be available broadly, without the taint of irrational discrimination,” said Thomas A. Saenz, MALDEF president and general counsel. “This settlement is one small step toward ensuring that that principle is satisfied.”

As part of the agreement, approved on Jan. 30, 2025, Kinecta has agreed to create a settlement fund of $77,500 to compensate the class of immigrants affected by the challenged practice. Kinecta will also change its practices and re-train staff as part of the agreement. 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 credit-worthiness.

Among other agreements, the settlement provides for $2,500 payments each to 31 class members. Kinecta must also pay attorneys’ fees and other costs.

“We are pleased with the Court's order preliminarily approving this settlement,” said Eduardo Casas, MALDEF attorney. “Beyond providing compensation for impacted individuals, this settlement ensures that individuals like them will have access to Kinecta's products and services in the future. Other lenders should recognize that these policies and practices are good for business and good for society.”

MALDEF filed the suit in May 2024 on behalf of Esqueda, a DACA recipient, who applied to Kinecta for an auto loan but was turned down because he obtained his social security card through DACA. Attorneys argued that Kinecta’s denial of a loan to Esqueda 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. The lawsuit was filed in the U.S. District Court for the Central District of California. The court has set a final approval date of May 30.

 Kinecta Federal Credit Union, based in Manhattan Beach, has 25 offices in two states with assets in excess of $6.8 billion and more than 270,000 members.

Since 2017, MALDEF has filed 20 lawsuits challenging the policies of financial institutions that discriminate against immigrants.

Founded in 1968, MALDEF is the nation’s leading Latino legal civil rights organization.  Often described as the “law firm of the Latino community,” MALDEF promotes social change through advocacy, communications, community education, and litigation in the areas of education, employment, immigrant rights, and political access. For more information on MALDEF, visit: www.maldef.org.