CFPB and DOJ Withdraw Joint Statement on Immigration Status in Credit Decisions

The Consumer Financial Protection Bureau and Department of Justice announced they have withdrawn a joint statement regarding creditor consideration of borrowers' immigration status under the Equal Credit Opportunity Act. The October 12, 2023 statement had cautioned that lender policies related to immigration or citizenship status could violate ECOA and Regulation B's prohibition on discrimination based on race and national origin.

The agencies said they withdrew the statement to avoid conflict with the express language of ECOA and Regulation B, which permit creditors to consider pertinent elements of creditworthiness and information necessary to protect creditor rights and remedies, including immigration or citizenship status.

Acting Director Russell Vought said the withdrawal corrects "the last administration's attempt to ignore these well-accepted and common-sense principles of our nation's fair lending laws," noting that ECOA regulations have "for decades" permitted lenders to consider lawful residence status and other information necessary to protect repayment rights.

Assistant Attorney General Harmeet K. Dhillon of the Justice Department's Civil Rights Division said the federal government is "committed to avoiding statements that could confuse the law or imply compliance standards for civil rights laws that lack any statutory or regulatory basis." She characterized the move as "restoring alignment with established federal civil rights law rather than continuing the prior administration's ideologically-driven departures."

The agencies said the withdrawal addresses concerns that the joint statement could confuse lenders about their ability to legitimately consider immigration status when necessary to avoid financial risks and comply with other laws. The withdrawal also addresses what the agencies called a "misimpression" that the joint statement interpreted 42 U.S.C. § 1981 to create new liability under the statute beyond what courts have already recognized.

The agencies said withdrawal is appropriate to avoid unnecessary burdens from new or increased compliance efforts that may have resulted from the original guidance.