Biden administration threatened banks into giving illegal immigrants a loan

In October 2023, the Biden administration's Department of Justice (DOJ) and the Consumer Financial Protection Bureau (CFPB) issued a joint statement that cautioned banks against having "blanket policies" to deny all credit to non-citizens solely based on their immigration status.

The guidance warned lenders that "unnecessary or overbroad reliance" on immigration status could violate the Equal Credit Opportunity Act (ECOA), a fair lending law that protects all applicants from discrimination, including on the basis of national origin.

The joint statement did not explicitly order banks to provide loans to "illegal immigrants" but rather clarified that while lenders are permitted to consider immigration status as a factor in determining the ability to repay a loan, they could not use a blanket refusal policy if the individual otherwise qualified for the loan and had a valid basis for community ties and employment authorization.

The guidance was met with criticism from Republican lawmakers, who argued that it could force financial institutions to take on undue risk if a borrower were to be deported. The current Trump administration is now in the process of reversing this guidance. In December 2025, the CFPB submitted a notice indicating its plan to withdraw the 2023 Biden-era joint statement.

Additionally, the Department of Housing and Urban Development (HUD) has already implemented a rule in March 2025 that restricts eligibility for FHA-insured mortgages to U.S. citizens and lawful permanent residents, explicitly excluding individuals with temporary status like DACA recipients and asylum seekers who were eligible under the Biden policy.

The Small Business Administration (SBA) has also introduced a similar citizenship verification requirement for all its loan programs in April 2025