WASHINGTON– The immigration and/or citizenship status can now be considered when determining what rights credit applicants have under federal regulations with respect to repayment, according to a position taken by the CFPB.
The new policy reverses an earlier policy adopted in 2023 under the Biden administration. Credit unions have in the past been targeted in lawsuits over loan denials due to immigration status.
In announcing the change, the Bureau noted that two years ago it joined with the Department of Justice (DoJ) in publishing a joint statement that warned the policies of creditors related to an applicant’s immigration or citizenship status could, in certain circumstances, run afoul of the Equal Credit Opportunity Act (ECOA), as well as Regulation B’s prohibition of discrimination on the basis of protected classes, including race and national origin.
‘Ideologically Driven Departures’
But in an updated statement, the CFPB and DoJ say they’ve now withdrawn the statement to avoid any conflict with the express language of ECOA and its implementing regulation, Reg B.
Statements from the CFPB and the DoJ said the new policy helps to clarify their action, and that the change corrects past actions while stopping “ideologically driven departures” from past administrations.
In addition, the Bureau and the CFPB said the ECOA and Regulation B “respectively permit creditors to consider pertinent elements of creditworthiness and information necessary to protect creditor rights and remedies, including a borrower’s immigration or citizenship status.”
