Nov 1 2023

WASHINGTON, D.C– Senator Thom Tillis and his colleagues recently penned a letter to Attorney General Merrick Garland and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra urging them to reconsider their October 12 joint statement on lending discrimination against “noncitizen borrowers.” 

Through the statement, which dramatically upends decades of guidance from the CFPB and the Federal Reserve, theDepartment of Justice (DOJ) and CFPB aim to force American financial institutions to extend loans to illegal immigrants. This practice contradicts longstanding legal interpretations from federal regulators and could create situations where lenders are unable to recoup loan payments from deported illegal immigrants.

“We write today to express our concerns regarding the October 12, 2023 joint statement by the CFPB and the DOJ warning financial institutions that the consideration of immigration status in loan applications may be a violation of the Equal Credit Opportunity Act (ECOA),” the senators wrote.

“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 continued

“While the CFPB and DOJ’s joint statement conflicts with decades of immigration status-related guidance from the CFPB and the Fed, it also poses serious risks to financial stability— encouraging financial institutions to ignore critical dispositive factors in their calculation of risk.  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,” the senators concluded.

Read the full letter HERE.