CFPB & DOJ Joint Statement on Fair Lending for Noncitizen Borrowers Summary

Updated 11/13/2023

This tool summarizes the recent Joint Statement issued by the CFPB and Department of Justice on the potential civil rights implications that can come up when a creditor considers an individual’s immigration status under the Equal Credit Opportunity Act (ECOA). Technically, ECOA does not prohibit consideration of immigration status, and so a creditor may consider immigration status when necessary to ascertain rights regarding repayment. However, the Statement makes clear that creditors need to be aware that “unnecessary or overbroad reliance on immigration status in the credit decisioning process” can give rise to potential violations of ECOA’s antidiscrimination provisions, in addition to other laws. While the Statement indicates that it is “for informational purposes only,” it is likely indicative of the CFPB’s and DOJ’s, and perhaps even other agencies’, current expectations.

The following are the key takeaways of the changes:

  • ECOA technically does not prohibit consideration of immigration status.
  • However, the only example of an allowance in Reg B is that a creditor may consider immigration status when necessary to ascertain its rights regarding repayment.
  • Beyond this, the Statement makes clear that a creditor’s “unnecessary or overbroad reliance on immigration status in the credit decisioning process” can give rise to violations of ECOA, Reg B, and 42 U.S.C. § 1981, discussed further below.

 

 

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