A credit applicant’s immigration or citizenship status will be considered when determining what rights they have under federal regulations with respect to repayment, the federal consumer financial protection agency said Monday, overturning a policy adopted in 2023.
According to the Consumer Financial Protection Bureau (CFPB), two years ago it and the Department of Justice (DOJ) published a joint statement which cautioned that creditor policies related to an applicant’s immigration or citizenship status could, in certain circumstances, run afoul of the Equal Credit Opportunity Act’s (ECOA) and Regulation B’s prohibition of discrimination on the basis of protected classes, including race and national origin.
Now, however, CFPB and DOJ claim that they have withdrawn the statement. They did that, they asserted, to avoid any conflict with the express language of ECOA and its implementing regulation, Regulation B.
Leaders of both the CFPB and DOJ’s civil rights division issued statements intended to clarify their action, saying they were correcting past actions and stopping “ideologically-driven departures” from past administrations.
They said the ECOA and Regulation B “respectively permit creditors to consider pertinent elements of credit-worthiness and information necessary to protect creditor rights and remedies, including a borrower’s immigration or citizenship status.”
They added that withdrawal of the policy was appropriate to avoid confusion that lenders may legitimately consider immigration status under several circumstances, including when necessary to avoid financial risks and to comply with other laws.
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