On January 12, the CFPB in conjunction with DOJ announced the withdrawal of a joint statement that previously cautioned lenders about the risks of considering a credit applicant’s immigration or citizenship status under the ECOA. The agencies clarified that neither the ECOA nor Regulation B prohibit creditors from considering immigration or citizenship status when evaluating credit applications, provided such information is not used to discriminate on a prohibited basis, such as race or national origin. The notice clarified that the withdrawal addressed concerns that the earlier statement may have implied new compliance requirements or limitations not supported by the statute or regulation.
The agencies contended that their joint statement’s emphasis on potential discrimination risks could have led to confusion among lenders, particularly regarding lawful underwriting practices and compliance with anti-money laundering or know-your-customer requirements. The CFPB cited its revised policy of issuing guidance only when necessary and to reduce compliance burdens (previously covered by InfoBytes here), concluding that further guidance on this topic was unnecessary.
[View source.]
