U.S. Regulators Tell Banks to Review Lending to Immigrants Without Work Permits

Federal bank regulators on Monday issued joint guidance directing banks to scrutinize lending decisions for mortgages, auto loans, credit cards and other consumer credit to immigrants without U.S. work authorization. The Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration stated that such borrowers may pose elevated credit risk because their ability to generate income, maintain employment and remain financially stable may be subject to greater uncertainty.

The guidance reminds banks of their existing duty to assess borrowers' willingness and capacity to repay loans. Comptroller of the Currency Jonathan Gould said the step reinforces a pre-existing obligation. "Banks have an obligation to know their customer.

That's a pre-existing obligation," he told CNBC. The guidance does not impose new rules on banks. It follows a May executive order from President Trump that directed regulators to crack down on the use of the financial system by unauthorized immigrants and to focus on credit risks tied to such lending.

Most mortgages require a Social Security number, though some borrowers obtain loans using an Individual Tax Identification Number. The Urban Institute estimated that 5,000 to 6,000 ITIN mortgages were originated in 2023, compared with roughly 4.6 million total mortgage originations that year. Banks are not required to collect citizenship information from customers.