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In a decisive move, U.S. Magistrate Judge Helena M. Barch-Kuchta has put an end to a contentious legal battle, approving a $120,000 settlement in a lawsuit alleging that Valley First Credit Union unlawfully denied loans to Deferred Action for Childhood Arrivals (DACA) recipients, including one of its former employees.

Judge Ends DACA Bias Suit : Significant Relief Granted

Judge Barch-Kuchta emphasized the significance of the settlement, granting $2,500 each to 48 DACA recipients who claimed discrimination by Valley First Credit Union between June 2020 and June 2022 due to their citizenship status. This recovery, surpassing 60% of potential damages under California's civil rights law, marks a substantial victory for the plaintiffs. "The corrective relief in this case is also significant. Valley First has agreed to change its underwriting policies and no longer deny membership based solely on their alienage or lack of U.S. citizenship," stated Judge Barch-Kuchta.

Judge Ends DACA Bias Suit : Praising the Settlement

Thomas Saenz, president of the Mexican American Legal Defense and Educational Fund, hailed the settlement as a milestone, asserting its role in reinstating Valley First's historical commitment to inclusive banking practices.

Silence from Valley First

Despite repeated attempts for comment, Valley First remained silent in response to the settlement.

Judge Ends DACA Bias Suit : Case Origins

The lawsuit, initiated in June 2022 by Karla Ayala, a former Valley First employee and DACA recipient, alleged emotional distress and violations of civil rights laws. Ayala's loan application was initially approved but later revoked when she was deemed ineligible due to her "work-only" Social Security number.

Arduous Negotiations

The road to settlement wasn't easy. Judge Barch-Kuchta sent the initial deal back for reworking, citing insufficient information on negotiation fairness. However, after revisions and additional disclosures, the judge preliminarily approved the settlement in November.

Judge Ends DACA Bias Suit : Legal Representation

Karla Ayala was represented by Luis Lozada and Thomas Saenz of the Mexican American Legal Defense and Educational Fund, while Valley First was represented by Stuart Matthew Richter of Katten Muchin Rosenman LLP.