Photo: Alamy
The Trump administration has rescinded Biden-era guidelines that required banks to ignore immigration status when evaluating loan and credit applications, reversing a policy that affected mortgages, credit cards and auto loans.
The Consumer Financial Protection Bureau and the Justice Department on Monday eliminated the guidance, which had directed lenders not to consider a borrower’s immigration status when making lending decisions.
The Biden administration argued that taking immigration status into account could violate anti-discrimination laws designed to ensure equal access to credit. Officials at the time said the policy was necessary to promote fair lending and prevent bias against immigrants.
Those rules were intended in part to help illegal immigrants and temporary visa holders establish roots in U.S. communities, including by securing financing for homes, vehicles and apartment leases.
The Trump administration said the guidance exceeded legal authority and misinterpreted federal law. Officials previously said that considering immigration and residency status does not violate the Equal Credit Opportunity Act of 1974.
“We are correcting the last administration’s attempt to ignore these well-accepted and common-sense principles of our nation’s fair lending laws,” acting CFPB Director Russell Vought said Monday.
“This administration is restoring alignment with established federal civil rights law rather than continuing the prior administration’s ideologically-driven departures,” said Harmeet Dhillon, assistant attorney general for the Justice Department’s Civil Rights Division.
The Biden guidance drew criticism when it was announced in 2023, particularly from Republican lawmakers. Vice President JD Vance, then an Ohio senator, argued that immigration status is a relevant factor in assessing credit risk.
At the time, Vance said excluding immigration status from lending decisions was “nothing short of common sense.”
“A borrower’s likelihood of repayment significantly falls if there is no guarantee that they will be residing in the same community, let alone the same country or legal system,” Vance wrote in a Senate letter signed by every Republican on the Senate Banking Committee in November 2023.
