On January 12, 2026, the CFPB and DOJ published a Federal Register Notice withdrawing Biden-era guidance concerning the consideration of immigration status when making credit decisions under ECOA. ECOA does not expressly prohibit consideration of immigration status. Under Regulation B, creditors may consider an applicant’s immigration status or status as a permanent resident (but not the applicant’s race or national origin) when ascertaining a creditor’s rights regarding repayment. In an October 12, 2023 joint statement by the Bureau and the Department of Justice (the 2023 Statement), the agencies recognized that Regulation B allows creditors to consider immigration status but stated that “unnecessary or overbroad reliance on immigration status in the credit decisioning process, including when that reliance is based on bias, may run afoul of ECOA’s antidiscrimination provisions.” The 2023 Statement advised, for example, that “if a creditor has a blanket policy of refusing to consider applicants from certain groups of noncitizens regardless of the credit qualifications of individual borrowers with that group,” such a policy may risk violating ECOA and Regulation B. The statement also flagged “overbroad consideration” of criteria such as how long a consumer has had a Social Security number.
In the January 12, 2026 Notice, the Bureau stated that the 2023 Statement, “by focusing primarily on risks that could arise if such consideration were used to discriminate on a protected basis . . . may have created the impression that either ECOA or the statement itself imposes limitations on the consideration of immigration or citizenship status when evaluating an application for credit.” To the contrary, the Bureau stated, “[n]o such limitation exists, and this withdrawal is intended to correct any such misimpression.” The Bureau stated that a credit applicant’s immigration or citizenship status may present underwriting risks and therefore “is something creditors may legitimately consider” in particular circumstances to assess risk in extending credit “to those without lawful status or who are otherwise unauthorized to work in the United States.”
In addition, the Bureau noted that the 2023 Statement regarding “overbroad consideration” of criteria such as how long a consumer has had a Social Security number could discourage the collection of such information when needed for compliance with anti-money laundering requirements. The Bureau stated that the withdrawal was consistent with its policy of issuing guidance only when necessary and where would doing so would reduce compliance burdens.
The post CFPB and DOJ Withdraw Biden-Era Joint Statement on Consideration of Immigration Status Under ECOA. appeared first on Consumer Finance Insights (CFI).