The Consumer Financial Protection Bureau and the U.S. Department of Justice recently withdrew a joint statement from October 2023 regarding the implications of a creditor’s consideration of an individual’s immigration status under the Equal Credit Opportunity Act (ECOA).
ECOA and Regulation B respectively permit creditors to consider pertinent elements of credit-worthiness and information necessary to protect creditor rights and remedies. The agencies had cautioned that creditor policies related to an applicant’s immigration or citizenship status could, in certain circumstances, run afoul of ECOA’s and Regulation B’s prohibition of discrimination on the basis of protected classes.
“For decades, ECOA regulations have permitted lenders to consider a borrower’s lawful residence status and other information necessary to protect their rights and remedies with respect to repayment,” Acting Consumer Financial Protection Bureau Director Russell Vought said. “We are correcting the last administration’s attempt to ignore these well-accepted and common-sense principles of our nation’s fair lending laws.”
The agencies said they withdrew the joint statement to avoid any conflict with the express language of ECOA and its implementing regulation, Regulation B, and because lenders may legitimately consider immigration status under several circumstances. The agencies also said withdrawal avoids any unnecessary burdens from new or increased compliance efforts.