The Trump administration released guidance on Monday through three federal banking regulators directing financial institutions to assess lending risks associated with borrowers who lack authorization to work in the United States. The agencies involved—the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and National Credit Union Administration—characterized unauthorized workers as presenting “elevated credit risk” due to potential uncertainties surrounding their ability to maintain employment and financial stability.
The regulatory guidance does not establish new binding requirements but rather reminds banks of existing obligations to evaluate borrower creditworthiness. Jonathan Gould, Comptroller of the Currency, emphasized that banks already have a fundamental duty to understand their customers and assess their capacity to repay debts. The guidance effectively encourages financial institutions to factor work authorization status into their risk management frameworks when making lending decisions.
Critics have raised concerns that the guidance could produce a “chilling effect” on banking access among immigrants generally, including those with valid work authorization. They argue it may increase compliance costs for financial institutions and potentially redirect economic activity toward unregulated lending channels, which could expose borrowers to increased fraud risks. Currently, data on lending patterns to undocumented immigrants remains limited, as banks face no requirement to collect citizenship information from customers.
Mortgage lending patterns provide limited insight into the scope of credit access for unauthorized immigrants. While most mortgages require a Social Security number for identity verification and credit history assessment, some lenders accept Individual Taxpayer Identification Numbers. According to the Urban Institute, approximately 5,000 to 6,000 ITIN mortgages were issued in 2023, representing a small fraction of the roughly 4.6 million mortgage originations that year.
The regulatory guidance represents an expansion of an earlier executive order issued in May directing regulators to monitor financial system usage by unauthorized immigrants across multiple credit categories including mortgages, auto loans, and credit cards. Legal analysts noted that while the order emphasizes immigration status as a relevant risk consideration, it appears to endorse a risk-based approach rather than mandating universal immigration status verification.
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