The Consumer Financial Protection Bureau and the Department of Justice have announced that they withdrew a joint statement regarding the implications of a creditor’s consideration of an person’s immigration status under the Equal Credit Opportunity Act (ECOA).
On Oct. 12, 2023, the two agencies published the joint statement cautioning that creditor policies related to an applicant’s immigration or citizenship status could, in some circumstances, run afoul of ECOA’s and Regulation B’s prohibition of discrimination on the basis of protected classes, including race and national origin.
The agencies said they withdrew the joint statement to avoid any conflict with the express language of ECOA and its implementing regulation, Regulation B.
Restoring Alignment With Established Laws
“For decades, ECOA regulations have permitted lenders to consider a borrower’s lawful residence status and other information necessary to protect their rights and remedies with respect to repayment,” said Acting Director Russell Vought at the Consumer Financial Protection Bureau. “We are correcting the last administration’s attempt to ignore these well-accepted and common-sense principles of our nation’s fair lending laws.”
“The federal government is committed to avoiding statements that could confuse the law or imply compliance standards for civil rights laws that lack any statutory or regulatory basis,” said Assistant Attorney General Harmeet K. Dhillon at the Justice Department’s Civil Rights Division. “This administration is restoring alignment with established federal civil rights law rather than continuing the prior administration’s ideologically-driven departures.”
The agencies said that ECOA and Regulation B permit creditors to consider pertinent elements of credit-worthiness and information needed to protect creditor rights and remedies, including a borrower’s immigration or citizenship status.
The said they also believe withdrawal is appropriate to avoid any confusion that lenders may legitimately consider immigration status under several circumstances, including when needed to avoid financial risks and to comply with other laws.
Addition, the agencies said that withdrawal is appropriate to address any misimpression that the joint statement interprets 42 U.S.C. § 1981 to confer any liability under the statute that has not already been recognized by courts.
The agencies said the withdrawal is appropriate to avoid any unnecessary burdens from new or increased compliance efforts.
