The Biden administration has issued a joint statement alerting banks and other lending institutions that people applying for credit are protected from discrimination based on their color and national origin, covered by the Equal Credit Opportunity Act, regardless of their immigration status. The statement was published in response to a lawsuit filed by the ACLU against the Equal Credit Opportunity Act (ECOA). The Consumer Financial Protection Bureau (CFPB) and the DOJ made the statement in response to reports from customers that they were denied credit cards, auto loans, student loans, personal loans, and equipment loans due to their immigration status, even though these individuals had solid credit histories and links to the United States.
The Director of the CFPB, Rohit Chopra, has emphasized that having an equal opportunity to obtain credit is essential for the process of amassing wealth and enhancing the financial security of households. Assistant Attorney General Kristen Clarke of the Department of Justice’s Civil Rights Division issued a warning to financial institutions, stating that if they do not extend credit to illegal aliens, they may be in violation of federal law. According to the Consumer Financial Protection Bureau (CFPB), it is not against the law to take into account a person’s immigration status when determining whether or not to lend them money; nevertheless, doing so excessively may be in violation of the law.
Even though citizenship status is not specifically mentioned as a protected class by the Equal Credit Opportunity Act (ECOA), it is illegal to discriminate against a person when reviewing their credit application on the basis of color, race, religion, sex,national origin, and other factors. This is the case even if the ECOA does not list citizenship status as a protected trait. Both organizations are aware that, despite the fact that the ECOA allows creditors to examine a person’s citizenship status, the very act of doing so may contravene prohibitions on the consideration of other factors, such as national origin or race. When taking into consideration an applicant’s immigration status, the authorities make it clear that there is no “safe harbor.”