The withdrawn statement, issued October 12, 2023, had cautioned that creditor policies tied to an applicant's immigration or citizenship status could violate ECOA's and Regulation B's prohibitions on discrimination based on race and national origin.
Acting CFPB Director Russell Vought said the move corrects "the last administration's attempt to ignore these well-accepted and common-sense principles of our nation's fair lending laws." Vought said ECOA regulations have "for decades" permitted lenders to consider a borrower's lawful residence status and other information necessary to protect repayment rights.
Assistant Attorney General Harmeet K. Dhillon, who leads 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."
Dhillon described the withdrawal as "restoring alignment with established federal civil rights law rather than continuing the prior administration's ideologically-driven departures."
The agencies said ECOA and Regulation B 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. They said the 2023 statement risked confusing lenders about their ability to legitimately consider immigration status when necessary to avoid financial risks and comply with other laws.
The agencies also said they acted to address any misimpression that the prior joint statement interpreted 42 U.S.C. § 1981 to confer liability "that has not already been recognized by courts." They added that withdrawal is appropriate to avoid unnecessary burdens from new or increased compliance efforts.