Consumer Financial Protection Bureau and Department of Justice withdraw joint fair lending statement on noncitizen borrowers

The Consumer Financial Protection Bureau and the Department of Justice withdrew their joint statement on fair lending and credit opportunities for noncitizen borrowers, reversing 2023 guidance on how creditors’ use of immigration status may implicate the Equal Credit Opportunity Act (ECOA) and Regulation B. The agencies framed the withdrawal as necessary to avoid conflict with the express language of ECOA and its implementing regulation. The October 12, 2023 statement had cautioned that creditor policies related to an applicant’s immigration or citizenship status could, in certain circumstances, run afoul of ECOA and Regulation B prohibitions on discrimination based on protected classes, including race and national origin. In withdrawing it, the agencies emphasised that ECOA and Regulation B permit creditors to consider pertinent elements of creditworthiness and information necessary to protect creditor rights and remedies, including a borrower’s immigration or citizenship status, and said the prior statement could confuse lenders about circumstances in which immigration status may legitimately be considered, including to manage financial risk and comply with other laws. The withdrawal also aimed to address any misimpression that the joint statement interpreted 42 U.S.C. § 1981 to create liability not already recognised by courts and to avoid unnecessary new or increased compliance burdens.