The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) have released a shared statement cautioning financial institutions against refusing credit cards, auto loans, and various credit offerings because of an individual’s immigration status.
The CFPB Launched an Initiative to Understand Immigrants’ Financial Experiences
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According to a statement on its website, the CFPB launched an initiative to gain a deeper understanding of the financial experiences of immigrants in the United States.
“Immediately” Do Not Qualify for a Loan, the Immigrant’s Boyfriend Was Told
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An example highlighted on the CFPB website follows, “On the phone, [the loan agent] mentioned how our [the consumer and their girlfriend’s] credit scores and income were very good and we should have not any issues getting a final approval [for an auto loan].” Upon learning that the consumer’s girlfriend was an immigrant with protection under DACA, however, the loan agent “immediately said we did not qualify.”
Immigrants Protected Under the Deferred Action for Childhood Arrivals, Denied Credit
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“The CFPB has heard feedback from advocates and consumers that some immigrant borrowers – including those protected under the Deferred Action for Childhood Arrivals (DACA) program – have been denied credit cards, auto loans, student loans, and other credit based on their immigration status,” they stated.
Denying Illegal Immigrants Credit May Violate the Law
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Their joint statement emphasizes the importance of fair lending and credit access for immigrant borrowers under the Equal Credit Opportunity Act (ECOA).
“A lender’s reliance on immigration status to deny credit to immigrant consumers and owners of small businesses may violate the law, depending on the facts and circumstances of a case.”
The Law Does Not Protect Lenders
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The DOJ and CFPB are unequivocal in their message to financial institutions, underscoring that denying loans based on immigration status may infringe upon the law, with no legal protection for lenders engaged in discriminatory practices.
“it does prohibit lenders from using immigration status to discriminate against an immigrant consumer or small business owner based on national origin, race, or other protected characteristics.”
“The statement seeks to remind lenders that they cannot use a consumer’s or entrepreneur’s immigration status to justify unlawful discrimination.”
Blanket Policies by Lenders Not Permitted
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A statement provided by the CFPB stated, “For example, if a creditor has a blanket policy of refusing to consider applications from certain groups of noncitizens regardless of the credit qualifications of individual borrowers within that group, that policy may risk violating ECOA and Regulation B.”
Lenders Cannot Consider How Long a Person Has Had an SSN For
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Furthermore, the excessively broad evaluation of specific factors, such as the duration of a consumer’s possession of a Social Security Number, could potentially suggest or indirectly reflect their citizenship or immigration status.
Consequently, this might bring into question a protected characteristic under the Equal Credit Opportunity Act (ECOA), such as national origin or race, if it were to be applied by lenders.
New American Fortune 500 in 2023 Report Sheds Light on Immigrant Contributions
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The “New American Fortune 500 in 2023: The Largest American Companies and Their Immigrant Roots” report reveals that nearly half (44.8%) of Fortune 500 companies were founded by immigrants or their descendants.
Two Out of Five of America’s Top-Earning Companies Founded by Immigrants
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A fresh study from the American Immigration Council shows that immigrants or their children started more than 40% of the top-earning American companies.
Immigrant-Founded Companies Made $8.1 Trillion in Revenue Last Year
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These 224 businesses founded by immigrants generated a staggering $8.1 trillion in revenue in 2022, surpassing the GDP of numerous countries.
Immigrants and Their Descendants Have Played a Pivotal Role
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“This report underscores the pivotal role that immigrants and their descendants play in shaping the nation’s economic landscape,” said Steven Hubbard, a senior data scientist at the American Immigration Council.
Immigrants Have Contributed to the US Economic Standing
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“Their innovative contributions and dedication to entrepreneurship have contributed significantly to the United States’ standing as a global economic powerhouse, as evident in this report,” he further stated.
Which States Are Home to the Most Immigrant-Founded Fortune 500 Companies?
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The report also analyzed the states hosting the most immigrant-founded Fortune 500 companies. New York led the way with 30, followed by California with 24, demonstrating their significant contribution to local economies and state income.
Immigrant-Founded Companies Employed Over 14 Million People
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These companies provided jobs to over 14.8 million individuals, underscoring their vital role in job creation and economic expansion.
The US Currently Faces Labor Shortages
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Recent research from SHRM indicates that a majority of employers believe that modernizing the US immigration system will promote economic growth, mitigate labor shortages, and maintain the nation’s competitive edge in attracting and retaining global talent.
“As the economy emerges from the pandemic, employers see workplace immigration as a solution to workforce challenges, a driver of economic growth, and key to keeping the United States globally competitive,” said Emily M. Dickens, SHRM’s chief of staff and head of public affairs.
The US Will Face the Consequences of a Shrinking Labor Force if Politicians Don’t Act
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If our political leaders don’t take action on immigration, we’ll continue to experience the repercussions of a diminishing labor force. Meanwhile, other nations are making progress.
Canada to Welcome Half a Million Migrants to Combat Labor Shortages
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Canada intends to greet an unprecedented 500,000 new permanent residents by 2025, and it has increased its goals for the following two years as part of its strategy to address a pressing labor shortage.
America’s Economic Success Relies on Welcoming New Immigrants
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In today’s context, the economic prosperity of the United States hinges on its openness to immigrants, who contribute to growth and affluence through their dedication and resilience.
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