New CFPB Advisory Telling Banks To Consider Immigration Status Does Not Create a New Legal Requirement
WASHINGTON – On Friday June 5, the Russell Vought-led Consumer Financial Protection (CFPB) issued a statement advising lenders to consider a borrower’s immigration status in assessing their ability to pay mortgage or credit card loans. The CFPB statement is part of the Trump Administration’s effort, mapped out in a May 19 Executive Order, to cut huge numbers of immigrants out of the mainstream financial system and use banks as a tool in the Administration’s mass deportation efforts.
The statement advises lenders that the Truth in Lending Act’s ability-to-repay requirements may obligate them to consider immigration status, especially where removal from the United States may disrupt the consumer’s income. However, the statement is only advisory and even states that “it has no legally binding effect.”
“This statement does not and cannot change existing law, which means it cannot impose a hard-and-fast requirement that lenders consider immigration status,” said Alys Cohen, director of housing advocacy and acting co-director of federal advocacy at the National Consumer Law Center (NCLC). “Ironically, in May 2025, the Vought-led CFPB criticized the last Bureau administration for using non-binding guidance.”
The CFPB notes that lenders are not required to consider changes in income that “cannot be reasonably anticipated.” There are 24 million non-citizens in the United States with varying types of immigration statuses, so the odds of any one individual immigrant being detained or removed are small, and lenders cannot reliably predict which customers would be affected and how. To the extent banks or other financial institutions do rely on immigration status, or perceived immigration status, in making lending decisions, those lenders risk violating the Equal Credit Opportunity Act’s prohibitions on discrimination on the basis of national origin.
“The statement is clear as mud,” said Chi Chi Wu, NCLC’s director of consumer reporting and data advocacy and acting co-director of federal advocacy. “It tells lenders that they should consider immigration status because there may be a loss of income if the immigrant is detained or deported. But it also recognizes that lenders can’t always reasonably predict that the immigrant will be detained or deported, and in those cases, lenders don’t need to consider immigration status.”
For credit cards, the Truth in Lending Act only requires lenders to consider ability-to-repay when the account is opened or the credit limit is raised. “There’s no need or reason for lenders to harass people with foreign sounding names who hold credit card accounts about their immigration status,” said Lauren Saunders, senior attorney at NCLC.
Separately on the same day, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and other bank regulators issued an advisory to financial institutions on non-work authorized populations and their employers, warning about “red flags” that could constitute suspicious activity under the Bank Secrecy Act. One such red flag, according to the advisory, is the use of Individual Taxpayer Identification Numbers (ITINs), which could signal the presence of non-authorized workers and, according to the advisory, the funding of criminal or terrorist organizations.
“The Trump Administration is trying to use the banking system to throttle employment opportunities for immigrant workers and curtail wealth building for people of all different immigration statuses,” saidCarla Sanchez-Adams, senior attorney at NCLC. “The advisory specifically targets small businesses in agriculture, construction, domestic service, hospitality, home health, and other industries where Black and Brown people lead in job creation and small-business growth.”
Related Resources
- NCLC Press Release: Executive Order Will Cut Off Financial Services to Millions of Immigrants, May 20, 2026
- Issue Brief: What States & Local Governments Can Do to Support Immigrants’ Financial Stability, April 17, 2026
- Press Release: ICE Has Created a Disaster in Minnesota; The Financial Services Industry Can Help, Feb. 9, 2026
- Comments on Treasury Department’s Request for Information on Financial Inclusion, Feb. 20, 2024
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