New Interagency Guidance on Lending to Individuals Without Legal Work Authorization

The OCC, FDIC, and NCUA have jointly issued new interagency guidance to remind supervised financial institutions of their existing obligations with respect to credit risk management as they relate to individuals not legally authorized to work in the United States. This guidance builds off an earlier CFPB statement clarifying that creditors are permitted, and, depending on the circumstances, may be obligated, to consider an applicant’s immigration status when making a good-faith determination of their ability to repay. (See prior WBK coverage.) 

The guidance encourages lenders to review their current underwriting and compliance frameworks to evaluate the sustainability of income sources, consider potential geographic or industry-specific concentration risks, and ensure that account management policies are equipped for the unique uncertainties related to employment authorization.