The Consumer Financial Protection Bureau and Department of Justice plan to withdraw 2023 guidance warning financial institutions that they risk violating federal protections against discrimination if they rely on immigration status to determine a consumer’s creditworthiness.
In the 2023 joint statement, the two agencies said that consumers have reported being rejected for credit cards as well as for auto, student, personal and equipment loans because of their immigration status, even when they have strong credit histories. Such rejections “may run afoul of the law,” they said.
The two agencies plan to rescind the statement, according to a filing to appear Monday in the Federal Register. “(B)y focusing primarily on risks that could arise if such consideration were used to discriminate on a protected basis, the joint statement may have created the impression that either [Equal Credit Opportunity Act] or the statement itself imposes limitations on the consideration of immigration or citizenship status when evaluating an application for credit,” they said. “No such limitation exists, and this withdrawal is intended to correct any such misimpression.”
The agencies added creditors who have structured their operations to be consistent with the joint letter “can continue to operate in that manner without penalty and, given that the joint statement was non-binding on the public or courts, consumers’ rights under ECOA are unchanged.”
The American Bankers Association raised several concerns about the joint statement in a 2024 letter to the CFPB and urged the two agencies to withdraw it. Among other things, ABA said the statement did more to confuse the issue rather than clarify it.
