The Trump administration on Monday issued guidance that experts say could reduce banks’ lending to certain unauthorized immigrants, the latest move by the White House to use the financial system to enforce stricter immigration policy.
The guidance issued by three federal bank regulators — the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration — said people who aren’t authorized to work in the U.S. may pose an “elevated credit risk” because their “ability to generate income, maintain employment, and remain financially stable may be subject to greater uncertainty.”
However, the guidance doesn’t appear to impose new rules on banks.
Instead, the regulators “remind” banks of their duties to manage the risks of lending to borrowers who lack U.S. work authorization, including assessing a borrower’s “willingness and capacity to repay” debt, according to the guidance.
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While most mortgages require borrowers to have a Social Security number — so lenders can verify their identity and pull credit history — some can get mortgages using an Individual Tax Identification Number, according to the Urban Institute, a think tank. Most ITIN holders are unauthorized immigrants, it said.
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