The US Consumer Financial Protection Bureau and the Department of Justice have withdrawn guidance that explicitly barred lenders from discriminating against immigrants and non-citizens, a move that could affect how immigrants access loans. The decision, announced on Monday, removes a Biden-era policy that had aimed to clarify how existing fair lending laws apply to immigration and citizenship status.
The guidance was issued in 2023 under former President Joe Biden. It stated that lenders could consider immigration or citizenship status while reviewing loan applications, but not as the sole factor and not in a way that caused bias or discrimination.
While federal law already prohibits discriminatory lending practices, the guidance was meant to clearly spell out how those protections apply to non-citizen borrowers.
In a joint statement announcing the change, Assistant Attorney General Harmeet Dhillon, who heads the Justice Department’s Civil Rights Division, said the guidance had been “ideologically-driven” and that withdrawing it restored alignment with established federal civil rights law.
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According to a Reuters report, former CFPB officials and consumer finance lawyers say the decision carries a broader message. Kris Kully, a partner at Mayer Brown, said the move reflects an anti-immigration approach consistent with the administration’s wider agenda. He said it could be seen by lenders as “a wink and a nod.”
The policy change comes as the administration has stepped up efforts to encourage immigrants without legal status to leave the country. Last April, it began voiding Social Security numbers that had been issued under temporary protected status. As reported by Reuters, lawyers state that lenders could adopt blanket rules, such as requiring an active Social Security number to apply for credit, which may align with current policy but still risk violating the law if used as a pretext to deny loans.
“That may be all part of the same thrust to just make it unpalatable and unaffordable, and in other ways just difficult to stay,” Kully said.
The guidance was issued in 2023 under former President Joe Biden. It stated that lenders could consider immigration or citizenship status while reviewing loan applications, but not as the sole factor and not in a way that caused bias or discrimination.
While federal law already prohibits discriminatory lending practices, the guidance was meant to clearly spell out how those protections apply to non-citizen borrowers.
In a joint statement announcing the change, Assistant Attorney General Harmeet Dhillon, who heads the Justice Department’s Civil Rights Division, said the guidance had been “ideologically-driven” and that withdrawing it restored alignment with established federal civil rights law.
(Join our ETNRI WhatsApp channel for all the latest updates)
According to a Reuters report, former CFPB officials and consumer finance lawyers say the decision carries a broader message. Kris Kully, a partner at Mayer Brown, said the move reflects an anti-immigration approach consistent with the administration’s wider agenda. He said it could be seen by lenders as “a wink and a nod.”
The policy change comes as the administration has stepped up efforts to encourage immigrants without legal status to leave the country. Last April, it began voiding Social Security numbers that had been issued under temporary protected status. As reported by Reuters, lawyers state that lenders could adopt blanket rules, such as requiring an active Social Security number to apply for credit, which may align with current policy but still risk violating the law if used as a pretext to deny loans.
“That may be all part of the same thrust to just make it unpalatable and unaffordable, and in other ways just difficult to stay,” Kully said.
