US Senate News:
Source: United States Senator John Kennedy (Louisiana)
WASHINGTON – Sen. John Kennedy (R-La.) joined Sen. J.D. Vance and all other Republican members of the Senate Banking Committee in urging the Consumer Financial Protection Bureau (CFPB) to reverse its guidance requiring lenders to open lines of credit for illegal immigrants.
On Oct. 12, the CFPB and the Department of Justice issued a joint directive warning lenders against “unnecessary or overbroad reliance” on a borrower’s immigration status.
In a letter to CFPB Director Rohit Chopra and Attorney General Merrick Garland, the senators wrote that the new guidance threatens the stability of financial institutions and defies common sense for lenders.
“[Y]our agencies claim that if a creditor has a ‘blanket policy’ on immigration status, then they risk violating fair lending laws. The joint statement also suggests that as long as an applicant for credit has a good credit score and other ‘credit qualifications,’ then his or her immigration status should not matter,” wrote the senators.
“The CFPB and DOJ’s joint directive not only flies in the face of responsible lending standards, risk-based pricing, and sound risk management, but also contradicts and rewrites decades worth of guidance from the CFPB and the federal banking regulators,” they continued.
“Financial institutions have long relied on this guidance in their assessment of credit risk, and the abrupt upending of the CFPB’s interpretation of Reg B and ECOA not only poses serious compliance costs, but could also have detrimental impacts on the safety and soundness of the banking sector, and financial stability in the American economy more broadly,” explained the lawmakers.
“[T]he importance of considering immigration status when assessing the potential of repayment is nothing short of common sense,” the senators added.
“As members of the Senate Committee on Banking, Housing, and Urban Affairs, we urge you to retract your agencies’ irresponsible joint statement and instead endorse risk-based lending practices that promote safety and soundness in the bank sector,” they concluded.
The full letter is available here.