Credit applicants cannot be denied loans solely because of their immigration status, according to a joint statement from the Consumer Financial Protection Bureau (CFPB) and Justice Department last week.
The statement was a reminder to lenders that credit applicants are “protected on the basis of their national origin, race, and other characteristics covered by the Equal Credit Opportunity Act, regardless of their immigration status.”
The statement followed reports of consumers being denied credit cards and loans because of their immigration status, even while having established credit in the United States. The statement states that the Equal Credit Opportunity Act allows a creditor to “consider an applicant’s immigration status when necessary to ascertain the creditor’s rights regarding repayment, creditors should be aware that unnecessary or overbroad reliance on immigration status, including when that reliance is based on bias, may run afoul of the law.”
CFPB Director Rohit Chopra said, “Fair access to credit is crucially important for building wealth and strengthening household financial stability. The CFPB will not allow companies to use immigration status as an excuse for illegal discrimination.”
Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division added, “This guidance reminds lenders that denying someone access to credit based solely on their actual or perceived immigrant status may violate federal law.”
The CFPB claims that some institutions have made it policy to deny credit to individuals based on their immigration status, claiming the Equal Credit Opportunity Act provided protection for the credit decision.
