CFPB, DOJ: Law protects credit applicants regardless of immigration status

The Consumer Financial Protection Bureau and Justice Department said in a joint statement that all credit applicants are protected from discrimination under the Equal Credit Opportunity Act, regardless of their immigration status.

Joint Statement: The agencies said:

• The ECOA allows creditors to consider an applicant’s immigration status when necessary to ascertain the creditor’s rights regarding repayment, but unnecessary or overbroad reliance on immigration status “may run afoul of the law.”

• Neither the ECOA nor its regulations provide companies a safe harbor with respect to other laws barring discrimination on the basis of immigration status.

Background: Regulation B, which implements the ECOA, says:

• An applicant's immigration status and ties to the community (such as employment and continued residence in the area) could have a bearing on a creditor's ability to obtain repayment, so creditors may consider immigration status.

• A denial of credit on the ground that an applicant is not a U.S. citizen is not per se discrimination based on national origin.

ICBA View: ICBA has concerns about the joint statement, which appears to contradict decades of practice, direction from banking regulators, and official guidelines under federal lending programs that require permanent residency or U.S citizenship to qualify. ICBA will be working with the CFPB and DOJ to procure further clarification regarding compliance with Regulation B.