After Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra recently delivered testimony before members of the U.S. House Financial Services Committee, where he called upon Congress to protect the lending and borrowing status of illegal aliens, the CFPB referred to a previously-issued statement when American Credit News raised concerns about illegal alien lending status and requested comment from the agency. 

“Immigration status can’t be used as some sort of pretext to discriminate against people illegally. Immigration status can’t be used as some sort of pretext to discriminate against people illegally. We’re really worried when someone uses a type of characteristic to discriminate against a whole protected class as a ruse,” Chopra said in a June 13 hearing before the Committee.

“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. 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.”

Following Chopra’s testimony, American Credit News contacted the CFPB and asked if it was concerned about lending practices to groups of immigrants like those mentioned by U.S. Senator J.D. Vance (R-Ohio), and if those same practices would potentially put financial institutions at risk if those immigrants were deported.

Also asked were if the CFPB requires reporting by financial institutions of lending by immigration status and what types of identification, if any, would the CFPB recommend financial institutions to require from immigrants they lend to.

In response, the CFPB’s Office of Communications referred American Credit News to the previous joint statement issued by the CFPB and the U.S. Department of Justice last October, in addition to Chopra’s congressional testimony.

The guidance which Chopra referred to in his testimony was a joint statement from the CFPB and the U.S. Department of Justice released on Oct. 12, 2023, titled “Joint Statement on Fair Lending Opportunities for Noncitizen Borrowers under the Equal Credit Opportunity Act” – which, in part, served to “remind financial institutions that all credit applicants are protected from discrimination on the basis of their national origin, race and other characteristics covered by the Equal Credit Opportunity Act, regardless of their immigration status.”

Both agencies issued the statement because, they added, “Consumers have reported being rejected for credit cards as well as for auto, student, personal and equipment loans because of their immigration status, even when they have strong credit histories and ties to the United States and are otherwise qualified to receive the loans.”

Three weeks after the joint statement was released, Sen. Vance responded on Nov. 1 and said, “Financial institutions are right to be concerned that they may never see a return on loans issued to illegal immigrants.”

Vance continued, “If someone is deported to their home country, how is a bank in Ohio supposed to recoup the loan it was forced to issue? The federal government should be cracking down on illegal immigration – not encouraging more of it.”

Alongside his fellow GOP members of the U.S. Senate Banking Committee, Vance sent a letter to Chopra and Attorney General Merrick Garland which asked them to reconsider their guidance.

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).