Patriot Brief
Trump reversed Biden-era lending rules that barred banks from considering immigration status.
The administration argues the prior policy stretched civil rights law beyond its intent.
Supporters say the change restores basic risk assessment and lending common sense.
The Biden administration tried to redefine common sense as discrimination. The Trump administration has now undone that experiment.
By eliminating rules that forced banks to ignore immigration status when issuing loans, the Trump White House isn’t rolling back civil rights. It’s reasserting reality. Lending has always been about risk, not ideology, and pretending otherwise doesn’t make the math disappear.
Under the Biden-era guidance, banks were effectively told that asking whether a borrower would still be in the country — or even subject to U.S. law — could violate fair lending statutes. That position wasn’t just aggressive; it was untethered from how credit actually works. Mortgages, auto loans, and credit cards aren’t acts of social policy. They’re financial contracts that depend on repayment within a stable legal framework.
The Trump administration’s move to rescind those rules restores that framework. Acting CFPB Director Russell Vought was blunt about the rationale: the prior administration tried to ignore long-accepted principles embedded in fair lending law. He’s right. The Equal Credit Opportunity Act was never meant to force lenders to ignore obvious factors tied directly to repayment risk.
The Biden team argued that considering immigration status amounted to discrimination. That claim collapses under even mild scrutiny. Immigration status isn’t race. It isn’t ethnicity. It’s a legal condition that determines whether a borrower remains within the jurisdiction that enforces the loan. Ignoring that distinction wasn’t compassion — it was willful blindness.
Former Ohio senator and now Vice President JD Vance said it plainly when the rule was first introduced: repayment likelihood drops dramatically when there’s no guarantee the borrower will remain in the country. That’s not a political talking point. It’s an underwriting fact. A loan issued to someone who may be deported isn’t inclusive. It’s irresponsible.
Assistant Attorney General Harmeet K. Dhillon framed the rollback correctly. This isn’t a departure from civil rights law; it’s a return to it. The Biden administration tried to stretch anti-discrimination statutes into tools for immigration policy. Congress never authorized that, and lenders were right to push back.
This change doesn’t ban anyone from applying for credit. It simply allows banks to assess risk honestly instead of pretending stability doesn’t matter. That’s better for financial institutions, better for borrowers who actually qualify, and better for a system that depends on trust.
Sometimes governance means choosing clarity over virtue signaling. On lending, at least, the Trump administration has done exactly that.
From Breitbart:
The Trump administration has canceled the Biden administration’s rules forcing banks to ignore immigration status for loan applications.
On Monday, the Consumer Financial Protection Bureau and the Justice Department eliminated the Biden guidelines that ordered lenders not to consider immigration status when evaluating loan and credit applications, a rule that had major implications for mortgages, credit cards, and auto loans, Bloomberg reported.
The Biden administration maintained that considering immigration status would violate anti-racism laws that ensure equal and fair lending practices.
The Biden era rules were intended to help anchor illegal and temporary visa workers into Americans’ communities, for example, by providing funds for homes, autos, and apartment leases.
But the Trump administration now says the rule went too far and was inappropriate and that considering immigration and residency status does not violate the 1974 Equal Credit Opportunity Act.
“We are correcting the last administration’s attempt to ignore these well-accepted and common-sense principles of our nation’s fair lending laws,” acting CFPB Director Russell Vought said on Monday.
The Biden administration warned that “unnecessary or overbroad reliance on immigration status” “may run afoul of ECOA’s antidiscrimination provisions.” But the new Trump interpretation finds that Biden’s proclamation has no regulatory or statutory basis.
“This administration is restoring alignment with established federal civil rights law rather than continuing the prior administration’s ideologically-driven departures,” Harmeet K. Dhillon, Trump’s assistant attorney general for the DOJs Civil Rights Division, said.
Biden’s rules raised many complaints when they were announced in 2023. One came from then-Ohio senator and now-Vice President JD Vance, who, when Biden made the change, said that considering immigration status as part of the loan vetting process is “nothing short of common sense.”
“A borrower’s likelihood of repayment significantly falls if there is no guarantee that they will be residing in the same community, let alone the same country or legal system,” said a Senate letter Vance, along with “every other Republican on the Senate Banking Committee,” signed in November of 2023.
“Financial institutions are right to be concerned that they may never see a return on loans issued to illegal immigrants,” then-Sen. Vance said in a press release.” If someone is deported to their home country, how is a bank in Ohio supposed recoup the loan it was forced to issue? The federal government should be cracking down on illegal immigration — not encouraging more of it.”
Photo Credit: White House/Daniel Torok