CFPB, Justice Department withdraw ECOA statement for noncitizens

The Consumer Financial Protection Bureau and Justice Department withdrew their joint statement on fair lending and credit opportunities for noncitizen borrowers.

Background: In October 2023, the agencies said in a joint statement that all credit applicants are protected from discrimination under the Equal Credit Opportunity Act, regardless of their immigration status.

Reasons for Withdrawal: The agencies said:

• They withdrew the joint statement to avoid any conflict with the express language of ECOA and its implementing regulation, Regulation B.

• They believe withdrawal is appropriate to avoid any confusion that lenders may legitimately consider immigration status under several circumstances, including when necessary to avoid financial risks and to comply with other laws.

• They believe withdrawal is appropriate to avoid any unnecessary burdens from new or increased compliance efforts.

ICBA View: ICBA in 2023 said it had 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.

More on Reg B: ICBA last month said the CFPB’s proposal to amend Reg B with ECOA's statutory text would reduce regulatory uncertainty and protect community banks from costly litigation, but the proposal needs to be refined.