What Lenders Should Know About Using Immigration and Citizenship Status Under ECOA in 2026

The current administration has clarified that the Equal Credit Opportunity Act allows creditors to evaluate immigration and citizenship status when it directly relates to credit risk or the creditor’s ability to enforce repayment.

Since 2023, lenders have operated under a regulatory statement that cautioned lenders that considering a credit applicant’s immigration or citizenship status could run afoul of ECOA’s anti-discrimination requirements under certain circumstances. The statement, issued by the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) during the Biden Administration, created confusion and compliance burdens for creditors by making it difficult to know when the consideration of a credit applicant’s immigration or citizenship status crossed the line into illegal discrimination on a prohibited basis (e.g., race or national origin).

On January 12, 2026, the CFPB and DOJ withdrew the 2023 Biden administration CFPB/DOJ Joint Statement (“2023 statement”) concerning the consideration of immigration or citizenship status under the Equal Credit Opportunity Act and Regulation B (ECOA).

2026 Notice of Withdrawal

The 2026 notice of withdrawal (“2026 notice”) notes the 2023 statement focused on the risks of discrimination that could arise from the consideration of a credit applicant’s immigration or citizenship status. That focus created the impression that ECOA (or the 2023 statement itself) imposed limitations on such consideration when no such limitation exists. Indeed, ECOA expressly allows a creditor to consider immigration or citizenship status as “necessary to ascertain the creditor’s rights and remedies regarding repayment.”

The 2026 notice states that by focusing exclusively on compliance risk, the 2023 statement ignores the legitimate use of immigration or citizenship status in fully assessing underwriting risks.

The 2023 statement caused many creditors to avoid asking questions relating to immigration and citizenship status to avoid perceived ECOA risks. The 2026 notice should clarify what ECOA permits.

What Is Permitted

Creditors may consider a credit applicant’s immigration and citizenship status when relevant to credit risk or repayment ability, including the consideration of the applicant’s:

• Lawful presence in the United States
• Work authorization duration and ability to remain legally employed
• Source and stability of income
• Expected residency during the loan term

What Is Not Permitted

• Using immigration or citizenship status as a proxy to facilitate discrimination on a prohibited basis (e.g., national origin or race)

Practical Implications for Lenders

Creditors should review their underwriting and compliance policies to ensure they reflect that any consideration of immigration or citizenship status is clearly tied to credit risk and repayment ability consistent with ECOA.

If you have questions about your institution’s underwriting policies, please contact the author of this article.