Creditors may be legally obligated to check a consumer’s immigration status for mortgage loans and credit cards, especially where removal from the U.S. may disrupt the consumer’s income, the Consumer Financial Protection Bureau said in guidance issued today.
Last month, President Trump directed regulators to provide guidance to financial institutions on identifying suspicious activity allegedly tied to undocumented immigrants, and the risk that undocumented immigrants might not repay their loans if they are subject to removal from the U.S. The CFPB statement says that considering immigration status, for example, when an applicant presents an ITIN instead of a Social Security number, could be required under the Truth in Lending Act, as implemented by Regulation Z.
“Regulation Z enables lenders to make these judgments by affirming their ability to lawfully consider the consumer’s immigration status, lawful presence, authorization to work and other factors that may indicate risk of removal insofar as it bears on their current or reasonably expected income from U.S.-based employment,” the guidance states.
The guidance is effective starting today. It comes only a few days after the Financial Crimes Enforcement Network – in conjunction with federal banking agencies – issued an advisory warning financial institutions to be vigilant against risks presented by the unlawful employment of undocumented immigrants.
