The Biden administration is issuing warnings to banks that decline credit lines and loans to undocumented immigrants. In a joint statement this week, the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) cautioned financial institutions.
“The Consumer Financial Protection Bureau (CFPB) and Justice Department today 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 Equal Credit Opportunity Act, regardless of their immigration status. The CFPB and Justice Department are issuing this statement 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 United States and are otherwise qualified to receive the loans,” the CFPB stated.
The CFPB and @TheJusticeDept today issued a joint statement that reminds financial institutions that all credit applicants are protected from illegal discrimination, regardless of their immigration status. https://t.co/L7cVVazP1m— consumerfinance.gov (@CFPB) October 12, 2023
Assistant Attorney General Kristen Clarke of the DOJ’s Civil Rights Division cautioned banks that they could potentially breach federal laws by refusing loans to undocumented immigrants.
Lenders should refrain from depriving individuals of the chance to secure a loan for purposes such as purchasing a home, advancing their businesses, or pursuing financial objectives, irrespective of any unlawful biases and without considering their genuine repayment capabilities.
This guidance serves as a reminder to lenders that excluding someone from credit solely due to their real or perceived immigrant status may constitute a violation of federal regulations.
Over 7.5 million undocumented immigrants have crossed the border since Joe Biden assumed office in January 2021.
These individuals are provided with financial assistance and housing, and now there is a push for banks to extend credit lines and loans to them.