CFPB, DOJ Joint Statement: Financial Institutions May Not Use Immigration Status To Illegally Discriminate Against Credit Applicants – General Immigration


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On October 12, the CFPB and DOJ issued a joint statement that reminds financial
institutions that all credit applicants are protected from
discrimination on the basis of their national origin, race, and
other characteristics covered by the ECOA, regardless of their
immigration status. According to the CFPB and DOJ, the statement
was issued because 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 and ties to the US and are otherwise
qualified to receive the loans.

The agencies stated that some financial institutions have
maintained blanket policies denying credit to individuals based on
their immigration status, regardless of their personal
circumstances and demonstrated ability to repay, arguing that the
ECOA and Regulation B, protect them whenever they consider
immigration status in making a credit decision. The agencies
further claim that other financial institutions have incorrectly
claimed that the ECOA shields lenders from liability under other
federal and state civil rights laws that bar discrimination on the
basis of someone’s status as an immigrant or noncitizen.

The joint statement explains that while the ECOA allows
creditors to consider immigration status when necessary to
ascertain the creditor’s rights regarding repayment,
unnecessary or overbroad reliance on immigration status may violate
the ECOA’s prohibition of discrimination on the basis of
national origin, race or another prohibited basis. The joint
statement also confirms that neither the ECOA or Regulation B
provide companies a safe harbor with respect to other laws barring
discrimination on the basis of immigration status.

Putting It Into Practice: While the ECOA allows
a creditor to consider an applicant’s immigration status when
necessary to ascertain the creditor’s rights regarding
repayment, creditors should be aware that unnecessary or overbroad
reliance on immigration status, including when that reliance is
based on bias, may run afoul of the law.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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