WASHINGTON, D.C. — Federal regulators on Friday withdrew a joint policy statement that had warned lenders about considering immigration status in credit decisions, marking a notable shift in federal fair-lending enforcement and a return to a more traditional interpretation of long-standing credit laws.
The Consumer Financial Protection Bureau and the Department of Justice said they rescinded the October 2023 guidance to avoid conflict with the express language of the Equal Credit Opportunity Act and its implementing regulation, Regulation B.
The earlier statement cautioned that creditor policies tied to an applicant’s immigration or citizenship status could, under certain circumstances, violate prohibitions against discrimination based on protected characteristics such as race and national origin. Federal officials said its withdrawal clarifies that existing law has long permitted lenders to consider lawful residence status and related factors when assessing repayment risk and protecting their legal rights.
“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 Russell Vought. He described the move as a correction to what he characterized as a prior administration effort to depart from established principles of fair-lending law.
Justice Department officials echoed that view, framing the decision as an effort to restore legal clarity and consistency. Harmeet K. Dhillon, who leads the department’s Civil Rights Division, said the federal government must avoid guidance that could confuse statutory requirements or suggest compliance standards without a firm legal foundation.
“This administration is restoring alignment with established federal civil rights law rather than continuing the prior administration’s ideologically driven departures,” Dhillon said.
Under ECOA and Regulation B, creditors are allowed to consider elements of creditworthiness and information necessary to protect their rights and remedies, including immigration or citizenship status, when appropriate. The agencies said the withdrawal is intended to prevent confusion among lenders and to avoid imposing new or expanded compliance obligations based on policy statements rather than binding law.
Officials also said the rescinded guidance risked creating the misimpression that federal civil rights statutes, including 42 U.S.C. § 1981, impose liabilities beyond those already recognized by courts.
The decision signals a broader recalibration in regulatory tone, emphasizing adherence to statutory text and long-standing interpretations over expansive guidance. For lenders, the move provides renewed certainty that practices historically permitted under federal law remain in place. For policymakers and advocates, it reopens debate over how immigration status intersects with access to credit — an issue now squarely returned to the language of the law and the courts.
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