The director of the Consumer Financial Protection Bureau (CFPB) said today that it is illegal for financial institutions to use “immigration status” of loan applicants in the loan application process.
“Immigration status can’t be used as some sort of pretext to discriminate against people illegally,” said CFPB Director Rohit Chopra in a hearing before the U.S. House Financial Services Committee. “We’re really worried when someone uses a type of characteristic to discriminate against a whole protected class as a ruse.”
“So what the guidance made clear is that national origin discrimination is one of many protected classes that is illegal to discriminate against under federal law,” said Chopra. “And while the guidance doesn’t say you have to lend to a certain person or not, when you use immigration status in a way that is pre textual, to discriminate against a certain group of people that is protected under law, that’s illegal.”
The joint statement being referred to by Chopra was issued last year in the form of a joint statement with U.S. Attorney General Merrick Garland, titled, “Joint Statement on Fair Lending Opportunities for Noncitizen Borrowers under the Equal Credit Opportunity Act.”
U.S. Senator J.D. Vance (R-Ohio) responded to that joint statement by saying, “Financial institutions are right to be concerned that they may never see a return on loans issued to illegal immigrants.
“If someone is deported to their home country, how is a bank in Ohio supposed to recoup the loan it was forced to issue?” said Vance in a statement. “The federal government should be cracking down on illegal immigration – not encouraging more of it.”
Vance joined all GOP U.S. Senate Banking committee members in sending a letter to Chopra and Garland asking them to reconsider their guidance.
Chopra’s testimony, however, appeared to reinforce his joint letter with Garland.
At least financial institution, the Latino Community Credit Union (LCCU), based in Durham, N.C., might be heeding Chopra’s guidance.
LCCU, a non-profit that has received more than $11 million in federal grants during the past ten years, is providing mortgages to illegal aliens, reported Restoration News in May.
“Restoration News spoke directly with a LCCU representative about what would be needed for an ‘undocumented immigrant’ to obtain a mortgage,” reported Victoria Manning. “We were provided with this link and were informed the client would ‘need to have at least a tax ID’ and they even offered to process the tax ID on behalf of the client.”
Elon University lists LCCU as a financial institution that “offers loans that undocumented immigrants can apply for to cover the cost of their DACA application.”
Also listed is Durham-based credit union, Self-Help Credit Union, which is a co-founder of LCCU. LCCU’s current president, Vicky Garcia, formerly served on Self-Help’s board, reported Durham Reporter.
“Self-Help Federal Credit Union offers loans that undocumented immigrants can apply for to cover the cost of their DACA application and loans to help cover the cost of the citizenship application process,” says the Elon website.
The CFPB was created in 2011 following the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It operates as an agency of the United States government with the primary mission to enforce federal consumer financial laws and protect consumers in the financial sector.
The bureau's jurisdiction encompasses banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, and other financial companies operating in the United States. The bureau spent $2.75 billion in FY 2023, according to the Government Accounting Office (GAO).