Federal regulators are warning the banking industry to carefully consider the risks of lending to individuals who lack authorization to work in the United States, including income uncertainty and the risk of deportation.
“When a borrower’s income is derived from employment that is not legally authorized, the source of repayment may be less reliable and may present increased credit risk,” the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA) said in joint guidance released on Monday.
The guidance does not impose new requirements or outright prohibit banks and credit unions from lending to such borrowers. Instead, it reminds them of their existing obligations….