CFPB Issues Guidance on Consideration of Immigration Status Based on Ability to Repay Requirements Without Providing Sufficient Detail to Assist Creditors

When the CFPB and Department of Justice withdrew a joint statement on the consideration of immigration status under the Equal Credit Opportunity Act in January 2026, we pointed out that “the agencies could have, but did not, [seek] to reduce compliance burdens by providing helpful guidance on how creditors may appropriately consider an applicant’s immigration status under ECOA. For example, it would be helpful to receive guidance on the consideration of an applicant’s immigration status in assessing the likelihood of continuation of income in the context of specific ability to repay determination requirements, particularly the requirements of the Regulation Z ability to repay rules for credit cards and for mortgage loans.”

The CFPB has now issued guidance on the consideration of immigration status in connection with the Regulation Z ability to repay requirements for credit cards and mortgage loans. Unfortunately, the guidance falls short of providing guideposts and will likely prove to be more problematic than helpful.

Regulation Z credit card provisions include the requirement that a “card issuer must not open a credit card account for a consumer under an open-end (not home-secured) consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the consumer’s ability to make the required minimum periodic payments under the terms of the account based on the consumer’s income or assets and the consumer’s current obligations.” Similarly, Regulation Z residential mortgage loan provisions include the general requirement that a “creditor shall not make a loan that is a covered transaction unless the creditor makes a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms.” One element of the determination required for credit cards and mortgages is that the creditor must consider the consumer’s current or reasonably expected income or assets. The qualified mortgage provisions of the ability to repay requirements also require that a creditor consider the consumer’s current or reasonably expected income or assets.

The guidance notes the credit card and general residential mortgage ability to repay and income consideration requirements, as well as the Regulation B authority for creditors to consider an applicant’s immigration status. The CFPB then advises that it is issuing the “guidance to remind creditors that, when determining repayment ability, creditors relying on an individual’s income derived from U.S.-based employment are permitted—and may, under certain facts and circumstances, be obligated—to consider information that bears on the consumer’s underlying and continuing ability to earn income—when residency in the United States is a necessary component of such employment. Where a change ‘cannot be reasonably anticipated’ from the application and relevant records, the change need not be considered.” The CFPB then states that the “obligation arises if documentation in the consumer’s application or other records indicates that the consumer’s repayment ability will change on account of their immigration status.”

The guidance moves on to address situations in which an applicant is not lawfully within the United States:

“[A] creditor’s awareness of a consumer’s immigration status may implicate a creditor’s reasonable expectations about whether a consumer’s income from U.S.-based employment will remain available for repayment. For example, a creditor may regard a credit applicant who is neither lawfully present nor permitted to work in the United States as being subject to removal, in light of the Administration’s stated policy of removing any person unlawfully present in the United States. Indications that an individual may not be lawfully present, and therefore may be at risk of removal, may come from various sources, including direct inquiry or the consumer’s reliance on atypical identification methods, such as an Individual Taxpayer Identification Number (ITIN), typically issued to taxpayers to individuals who lack proof of legal residency.

To the extent a creditor’s information regarding the borrower’s immigration status indicates that the borrower may be an unlawfully present individual and removed from the United States, there is a danger that removal would render any such borrower unable to earn income derived from employment that requires physical presence in the United States. Accordingly, considering whether information regarding an applicant’s immigration status indicates a reasonably expected change in future income is a matter of sound compliance practice. The Bureau expects compliance with the law and failure to account for such a reasonably expected change in income may not comply with a creditor’s obligation to reasonably assess a borrower’s ability to repay the loan or line of credit sought.” (Footnote omitted.)

Unfortunately, the guidance then punts on providing specific guideposts for lenders:

“Of course, there are a wide variety of lawful immigration statuses in the United States. Assessing how each status might bear on a lender’s reasonable expectation that a consumer has the ability to repay an obligation with U.S.-based employment income is varied, and it cannot be assumed that consumers with different lawful statuses have identical abilities to repay. Accordingly, the Bureau cannot, and does not, provide a comprehensive analysis of variations in immigration status and the consequent reasonable expectations as to a consumer’s ability to repay a loan through expected income from U.S.-based employment. Rather, the Bureau reminds creditors when future changes in borrower income must be considered under Regulation Z. Regulation Z enables lenders to make these judgments by affirming their ability to lawfully consider the consumer’s immigration status, lawful presence, authorization to work, and other factors that may indicate risk of removal insofar as it bears on their current or reasonably expected income from U.S.-based employment.” (Footnote omitted.)

When the CFPB withdrew 67 guidance documents in May 2025, it stated that “it is the Bureau’s current policy to avoid issuing guidance except where necessary and where compliance burdens would be reduced rather than increased.”  The immigration status guidance represents a departure from this policy. The guidance warns creditors of the risk of not complying with ability to repay requirements by not considering immigration status, particularly the status of an applicant not lawfully within the country, but fails to provide detail on situations in which a creditor would need to decline an application because of immigration status. The guidance, thus, increases the compliance burden of creditors. In particular, it appears that creditors may need to become experts in immigration law or engage counsel with such expertise.