Protecting immigrant access to fair credit opportunities
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The Consumer Financial Protection Bureau (CFPB) has launched an initiative to better understand the financial experiences of immigrants in the United States. Like other consumers across the United States, many immigrants borrow to start businesses, purchase automobiles, and buy homes. However, their financial experiences often differ.
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. Immigrant consumers and entrepreneurs have shared their experiences of being turned away by financial institutions despite having strong personal financial circumstances – including credit history, income, or other factors – that may resolve concerns about their ability to repay loans.
When financial institutions make decisions based on immigration status rather than credit considerations, immigrant consumers can face more limited access to competitive credit products or must rely on more expensive loan products than other borrowers.
The CFPB and the Department of Justice have issued a joint statement on fair lending and credit opportunities 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. ECOA does not prohibit lenders from considering a borrower’s immigration status when evaluating a credit application and whether they’re able to repay the loan, but 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.
Consumer complaints reveal problematic practices
The CFPB has received consumer complaints about loan denials due to immigration status. Consumers submitting complaints have described getting positive feedback from lenders about their credit scores, income, and other aspects of their financial history, but ultimately being denied a loan because of their immigration status, instead of their ability to repay the loan.
“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.”
What immigrant consumers – and their advocates – need to know
Learn about protections from credit discrimination. The CFPB provides several resources outlining consumer’s rights and protections from credit discrimination. These resources are available in several languages, including English, Spanish, Chinese, Vietnamese, Korean, Tagalog, Russian, Arabic, and Haitian Creole.
Submit a complaint. Immigrant consumers, who believe that a company may be engaging in lending discrimination or other unlawful credit practices, can submit a complaint to the CFPB online or over the phone. The CFPB provides interpretation services in over 180 languages for complaints submitted over the phone, making it easier for non-native English speakers to access the service.
Access to fair, competitive, and nondiscriminatory credit products is crucial to building wealth and realizing the American dream. The CFPB will continue to take steps to ensure that all consumers, including immigrants, have equal access to credit opportunities.