As reported by Bloomberg here, the Consumer Financial Protection Bureau (CFPB or Bureau) is moving to withdraw a 2023 Biden-era joint statement with the U.S. Department of Justice (DOJ) that warned lenders against overbroad use of immigration status in credit decisions. The notice, submitted to the White House’s Office of Information and Regulatory Affairs (OIRA), ties together two hallmark priorities of the current Trump administration: a harder line on immigration and a continued effort to scale back fair lending enforcement. While the underlying Equal Credit Opportunity Act (ECOA) remains unchanged, the move signals a sharp shift in how the CFPB and DOJ are likely to interpret and enforce its protections for noncitizen borrowers.
What the 2023 Joint Statement Said
The 2023 CFPB–DOJ joint statement was the Biden administration’s formal view on when and how lenders may consider immigration or citizenship status under ECOA. It acknowledged that immigration status can be relevant to legitimate credit risk questions such as repayment rights or compliance with sanctions laws restricting dealings with certain countries. But the agencies cautioned that “unnecessary or overbroad reliance on immigration status in the credit decisioning process, including when that reliance is based on bias, may run afoul of ECOA’s antidiscrimination provisions and could also violate other laws.” They warned, for example, that blanket policies categorically rejecting certain classes of noncitizens could function as proxies for race or ethnicity and thus present serious fair lending risk. The statement also flagged practices like relying on the length of time someone has held a Social Security number or similar documents as potential sources of unlawful discrimination.
The Withdrawal Effort and Process
According to Bloomberg, the CFPB has sent a notice to OIRA seeking to withdraw that 2023 guidance. OIRA, housed within the Office of Management and Budget, reviews significant regulatory actions, and President Trump has directed even independent agencies like the CFPB to route major policies through that process. OMB Director Russell Vought is also serving as the CFPB’s acting chief, underscoring the White House’s direct role in shaping the Bureau’s agenda. The CFPB and DOJ reportedly did not respond to requests for comment. While withdrawal of a policy statement does not alter ECOA or its implementing rules, rescinding the guidance would remove an explicit, published articulation of how those agencies previously viewed immigration-related practices under federal fair lending law.
Our Take
If the CFPB follows through on withdrawing the Biden-era immigration-status guidance, it would mark another notable step in reshaping federal fair lending law enforcement. Institutions that have adjusted policies in light of the 2023 joint statement will need to think carefully about whether to change course, bearing in mind that the statutory and regulatory framework has not changed, that litigation and reputational risks remain, and that state attorneys general and other regulators may continue to scrutinize practices they view as discriminatory, with or without a formal CFPB–DOJ policy in place.