U.S. Sen. Thom Tillis R-NC) is among a group of lawmakers urging the Consumer Financial Protection Bureau (CFPB) and the Attorney General to reconsider their joint statement on lending discrimination against “noncitizen borrowers.”
The statement, which supports the idea of financial institutions offering loans to illegal immigrants, upends decades of guidance from the CFPB and the Federal Reserve and contradicts longstanding legal interpretations, said Tillis. The senator added that it could also create situations where lenders are unable to recoup loan payments from deported illegal immigrants.
“While the CFPB and DOJ note that financial institutions are permitted to consider immigration status under the ECOA, they claim that unnecessary or overbroad reliance on immigration status ‘may run afoul of the law,’ and that all borrowers, regardless of immigration status, are protected from discrimination. Specifically, your agencies claim that if a creditor has a ‘blanket policy’ on immigration status, then they risk violating fair lending laws. The joint statement also suggests that as long as an applicant for credit has a good credit score and other credit qualifications, then his or her immigration status should not matter,” the senators wrote in a letter to CFPB Director Rohit Chopra and Attorney General Merrick Garland.
Along with Tillis, the letter was signed by other Republicans on the Senate Finance Committee.
“Additionally, the fact that your agencies moved forward with this guidance outside of the APA rulemaking process, and without any advanced communication or feedback from industry, raises even more concerns. As members of the Senate Committee on Banking, Housing, and Urban Affairs, we urge you to retract your agencies’ irresponsible joint statement and instead endorse risk-based lending practices that promote safety and soundness in the bank sector,” they concluded.