Regulators Issue Guidance on Credit Risk for Unauthorized Workers

Federal banking regulators issued guidance on Monday to remind financial institutions of their existing obligations for managing credit risk when lending to borrowers who are not legally authorized to work in the U.S. The Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corp. (FDIC), and the National Credit Union Administration (NCUA) stated that lending to individuals without work authorization "may present elevated credit risk because a borrower’s ability to generate income, maintain employment, and remain financially stable may be subject to greater uncertainty."

The guidance is linked to President Donald Trump’s May 19 executive order, "Restoring Integrity to America’s Financial System." This order directed federal agencies to address perceived risks to the financial system from providing credit or financial services to individuals considered inadmissible or removable under immigration laws. The executive order specifically requested that banking regulators issue guidance within 60 days on managing credit risks associated with borrowers not authorized to work in the U.S.

The issued guidance does not prohibit banks, credit unions, or other supervised financial institutions from lending to borrowers based on their immigration status. Instead, it directs these institutions to evaluate repayment risks using their existing underwriting and risk management practices. Financial institutions are instructed to "identify, measure, monitor, and control these risks through safe and sound underwriting practices that assess a borrower’s willingness and capacity to repay according to the terms of the credit obligation."

Regulators also emphasized that institutions should continue to apply applicable consumer protection laws when evaluating borrowers. The guidance specifically references a June 2026 statement from the Consumer Financial Protection Bureau (CFPB) concerning ability-to-repay requirements and immigration status.