the Consumer Financial Protection Bureau (CFPB) issued a statement on Friday (June 5) reminded creditors that when they evaluate consumers’ ability to repay mortgages and some open-ended credit products, they must take into account their immigration status.
This consideration is part of the requirements of creditors under Truth in lending law The statement said that Executive Regulation Z.
“This statement emphasizes to creditors that these requirements may mandate consideration of a consumer’s immigration status, particularly when removal from the United States could disrupt the consumer’s income,” the CFPB said in the statement.
The statement was published in the Federal Register The issue of public inspection on Friday and is scheduled to be published in the Federal Register on Monday (June 8).
Ross Footeboss Office of Management and Budget (OMB) and the CFPB’s acting director, reviewed the statement on Thursday (June 4). mail On X which includes a link to Fox Business a report About the statement that will be issued soon.
“An individual’s illegal immigration status must be taken into account in their ‘ability to repay’ under the Truth in Lending Act,” Vaught said in the post.
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In the statement, the CFPB said creditors may learn that an applicant may not be legally present in the country, and therefore are at risk of removal, through direct investigation, and the applicant’s use of identification methods typically issued to people without proof of legal residency, or other sources. The agency said this information could indicate that an applicant may not be able to earn income if deported from the United States.
“The Bureau expects compliance with the law and failure to account for such a reasonably anticipated change in income may fail to comply with the creditor’s obligation to reasonably evaluate the borrower’s ability to repay the requested loan or line of credit,” the CFPB said.
In January, the CFPB and Ministry of Justice Withdrawn of 2023 joint statement warning lenders not to consider applicant’s application Immigration status When extending credit.
The retracted joint statement warned lenders that policies regarding borrower status could violate provisions of the Equal Credit Opportunity Act (ECOA) and Regulation B that prohibit discrimination on the basis of race, national origin, and other protected classes.
In a January press release announcing the withdrawal of the joint statement, Foot said that ECA regulations had, for decades, allowed lenders to consider borrowers’ residency status and other information.
“We are correcting the administration’s recent attempt to ignore these well-accepted and common-sense principles of our nation’s fair lending laws,” Vaught said in the statement.
