Regulators Issue New Guidance on Bank Lending Risk Tied to Borrowers Living Illegally in US
- On Monday, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the National Credit Union Association issued guidance requiring financial institutions to identify, measure, monitor, and control credit risks for borrowers not authorized to work in the U.S.
- President Donald Trump's executive order signed in May mandated that banks scrutinize customer citizenship to identify individuals without legal status opening accounts or obtaining credit cards. This order triggered the current wave of banking regulation changes.
- In May, the Treasury's financial crimes arm, FinCEN, advised banks to watch for identity theft and payroll tax fraud linked to hiring unauthorized workers. Institutions must remain alert for more than a dozen red flags indicating unauthorized residency.
- The Treasury last November reclassified certain refundable tax credits as "federal public benefits," barring immigrant taxpayers with DACA or Temporary Protected Status from receiving them even if they file taxes. Officials claim unauthorized workers pose systemic risk to the financial system.
- These measures are designed to strongly encourage banks to remove such customers, though the administration has not expressly mandated removal. Limited data exists on how many individuals without legal status currently hold bank accounts or loans.
59 Articles
59 Articles
Feds warn banks on lending to unauthorized workers
The Trump administration on Monday released guidance from several financial regulators reminding banks and credit unions about the credit risks posed by lending to borrowers who aren't authorized to work in the U.S.The guidance said that borrowers who aren't legally eligible to work in the U.S. pose an elevated credit risk because there's greater uncertainty about their ability to generate income, maintain employment and remain financially stabl…
The Dallas Express News
wbap.comCould Deportation Cost A Borrower A Loan? Banks Told To Weigh The Risk
Federal regulators told banks and credit unions Monday to weigh whether borrowers without legal work authorization could lose income through job termination, expired work authorization or removal from the United States when evaluating mortgages, auto loans, credit cards and other debts. The Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration issued the joint guidance. The agen…
(New York = Yonhap News) Correspondent Lee Ji-heon = The Wall Street Journal (WSJ)... U.S. financial authorities have ordered banks to lower lending thresholds for illegal immigrants.
Federal Regulators Warn Banks on Lending to Illegal Workers
Federal regulators are warning the banking industry to carefully consider the risks of lending to individuals who lack authorization to work in the United States, including income uncertainty and the risk of deportation. “When a borrower’s income is derived from employment that is not legally authorized, the source of repayment may be less reliable and may present increased credit risk,” the Office of the Comptroller of the Currency (OCC), the…
Trump administration urges banks to scrutinize lending to immigrants without work authorization
Federal bank regulators issued guidance Monday seeking to curb mortgages, auto loans and other consumer credit to immigrants without U.S. work authorization.
Regulators issue new guidance on bank lending risk tied to borrowers living illegally in US - The Boston Globe
The newest warning is one of several measures the Trump administration has taken to discourage people in the US illegally from interacting with the larger financial system.
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