CFPB And DOJ Withdraw Joint Statement On Consideration Of Immigration Status Under ECOA

As previously reported, in October 2023 the CFPB and DOJ issued a joint statement regarding "the potential civil rights implications of a creditor's consideration of an individual's immigration status under the Equal Credit Opportunity Act (ECOA)." We were critical of the joint statement, and observed that:

The agencies have now withdrawn the joint statement. The withdrawal was based on concerns that the joint statement (1) "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 [when] [n]o such limitation exists" and (2) was not consistent with the CFPB's revised policy on issuing guidance documents that was announced in May 2025.

In withdrawing the joint statement, the agencies correctly observe that "[n]othing in ECOA or Regulation B prohibits the consideration of an applicant's immigration or citizen status. To the contrary, Regulation B permits the consideration of 'any information obtained, so long as the information is not used to discriminate against an applicant on a prohibited basis.'" The agencies also note that a Regulation B Commentary provision states that a "creditor may take the applicant's immigration status into account" and another Regulation B provision states that a creditor "may consider the applicant's immigration status or status as a permanent resident of the United States, and any additional information that may be necessary to ascertain the creditor's rights and remedies regarding repayment." The agencies then state that "[t]he joint statement's exclusive emphasis on the risks of such consideration, however, may have created the misimpression that ECOA or Regulation B prohibit or otherwise limit the consideration of immigration or citizenship status by a creditor evaluating an application for credit."

The joint statement included the following examples of creditor practices that could risk violating ECOA and Regulation B:

• A blanket policy of refusing to consider applications from certain groups of noncitizens regardless of the credit qualifications of individual borrowers within that group. Compliance risk could arise because some individuals within those groups may have sufficient credit scores or other individual circumstances that may resolve concerns about the creditor's rights and remedies regarding repayment.
• The overbroad consideration of certain criteria, such as how long a consumer has had a Social Security Number. This could implicate or serve as a proxy for citizenship or immigration status, which in turn, can implicate a protected characteristic under ECOA like national origin or race. Any claims that such policies are necessary to preserve the creditor's rights and remedies regarding repayment or to meet other binding legal obligations should be supported by evidence and cannot be a pretext for discrimination.
• Requiring documentation, identification, or in-person applications only from certain groups of noncitizens, and this requirement is not necessary for assessing the creditor's ability to obtain repayment or fulfilling the creditors' legal obligations.

The agencies now criticize the first two examples. The agencies state that the first example "could be read as positing a bright-line, one-size-fits-all approach to underwriting noncitizens as necessary for ECOA compliance [when] [t]here is no such requirement in ECOA or Regulation B" and that a "credit applicant's immigration or citizenship status may present underwriting risks that typical assessments of financial capacity alone will not fully resolve." Addressing the second example, the agencies state that the "example may have been perceived as discouraging the collection and assessment of [Social Security Number] information when in fact it can be important to a creditor's compliance with anti-money laundering or Know Your Customer requirements."

The joint statement also cautioned creditors to be mindful of their obligations under 42 U.S.C. § 1981. Section 1981 provides that "[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens[.]" The joint statement provided that this statute "has long been construed to prohibit discrimination based on alienage" and that except to the extent consideration of immigration status is permissible under ECOA and Regulation B, creditors must comply with both statutes. Addressing this aspect of the joint statement, the agencies state that their "withdrawal of the joint statement serves to address any misimpression that the joint statement has interpreted section 1981 to confer any liability under the statute that has not already been recognized by courts."

Addressing the CFPB's revised policy on issuing guidance, the agencies note that the "revised policy is to issue guidance only where necessary and where doing so would reduce compliance burdens." The agencies then state that "[g]iven that it is the responsibility of Congress and the President in the legislative process to define or expand the contours of civil rights protections, the agencies have determined that the joint statement is not necessary" and that "the joint statement does not meet the Bureau's current standards for the issuance of guidance."

While the withdrawal of the joint statement is a positive development, the agencies could have, but did not, sought to reduce compliance burdens by providing helpful guidance on how creditors may appropriately consider an applicant's immigration status under ECOA. For example, it would be helpful to receive guidance on the consideration of an applicant's immigration status in assessing the likelihood of continuation of income in the context of specific ability to repay determination requirements, particularly the requirements of the Regulation Z ability to repay rules for credit cards and for mortgage loans.

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