Maryland Legal Alert for Financial Services

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OCC Highlights CFPB Guidance on Ability-to-Repay Requirements and Immigration Status

OCC and FDIC Propose Significant Revisions to Community Reinvestment Act Regulations 

OCC Highlights CFPB Guidance on Ability-to-Repay Requirements and Immigration Status

On July 13, 2026, the Office of the Comptroller of the Currency ("OCC") issued Bulletin 2026-31, highlighting the Consumer Financial Protection Bureau's ("CFPB") June 8, 2026, Statement on Ability to Repay and Immigration Status. The Bulletin reminds financial institutions that existing federal consumer lending laws require creditors to make reasonable, good-faith determinations of a borrower's ability to repay and that, under certain circumstances, information relating to an applicant's immigration status may be relevant to that analysis. 

The CFPB's statement does not create new legal obligations or amend existing regulations. Rather, it clarifies how creditors should apply the ability-to-repay requirements under the Truth in Lending Act ("TILA") and Regulation Z when evaluating mortgage loans and certain open-end consumer credit products, including credit cards. Specifically, the CFPB explains that creditors relying on income derived from U.S.-based employment may — and, in some circumstances, may be required to — consider information indicating that a consumer's immigration status could reasonably affect the consumer's ability to continue earning that income. For example, if information contained in the loan application or other records indicates that an applicant's employment authorization or lawful presence may expire or otherwise affect future employment, creditors should consider whether that information is relevant to the applicant's reasonably expected future income and repayment capacity. 

At the same time, the CFPB emphasized that creditors should not apply blanket assumptions or categorical rules based on immigration status. Instead, creditors are expected to make individualized, fact-specific determinations based on the information available at the time of underwriting. The statement also reiterates that Regulation B permits creditors to consider immigration status and information necessary to evaluate their rights and remedies regarding repayment where appropriate, provided those considerations remain consistent with the Equal Credit Opportunity Act ("ECOA") and other applicable fair lending requirements. 

The OCC's Bulletin reinforces these principles from a supervisory perspective. While acknowledging that uncertainties surrounding employment authorization may affect repayment capacity, collateral recovery, or other credit risk considerations, the OCC reminds financial institutions that underwriting decisions should remain grounded in objective evidence and documented analyses rather than generalized assumptions. Financial institutions should continue evaluating applicants based on the factors required under Regulation Z, including current or reasonably expected income or assets, employment status, existing debt obligations, debt-to-income ratio or residual income, and credit history. 

Practice Pointer: Financial institutions should review their underwriting policies and procedures to ensure they accurately reflect the CFPB's guidance and the OCC's supervisory expectations. Institutions may also wish to evaluate employee training, fair lending monitoring programs, and documentation standards to confirm that lending decisions involving immigration-related information are supported by individualized analyses and legitimate credit risk considerations. As examiners continue to focus on safety and soundness, as well as fair lending compliance, financial institutions should ensure that their underwriting practices appropriately balance repayment risk with compliance under TILA, Regulation Z, ECOA, and Regulation B. 

For more information concerning this topic, please contact Christopher R. Rahl.

Contact Christopher R. Rahl | 410-576-4222

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OCC and FDIC Propose Significant Revisions to Community Reinvestment Act Regulations 

On July 31, 2026, the Office of the Comptroller of the Currency ("OCC") and the Federal Deposit Insurance Corporation ("FDIC") jointly issued a Notice of Proposed Rulemaking that would substantially revise the regulations implementing the Community Reinvestment Act ("CRA"). The proposal seeks to modernize the CRA framework, reduce regulatory burdens imposed on many community banks, and refocus examinations of financial institutions on lending activities that directly serve local communities, including strengthening requirements to ensure that community development grants reach the communities they are intended to benefit.  

The Notice proposed the following changes to the CRA framework:  

• Changes to the Asset Threshold: The proposal would significantly revise the asset thresholds used to classify financial institutions for CRA examinations. Under the proposed framework, the small financial institution threshold would increase from less than $412 million to less than $1 billion in assets. The intermediate financial institution category would expand to include institutions with assets between $1 billion and $10 billion. Lastly, financial institutions with more than $10 billion in assets would be classified as large financial institutions. These changes are intended to better reflect the current size and composition of today's banking industry.  
   
• Greater Focus on Lending Performance: The proposal would place greater emphasis on evaluating a financial institution's primary retail lending activities. Examinations would focus on major product lines, including mortgage, small business, small farm, and, where applicable, consumer lending, regardless of the institution’s asset size. The proposal would also limit the retail service test to credit-related services by eliminating consideration of deposit services.   
   
• Changes to Community Development Activities: The proposal would revise how community development activities are evaluated by creating separate categories for community development investments and grants and by establishing clearer criteria for eligibility requirements for each. It would also update the community development definitions by replacing the term "community services" with "civic assistance" and adopting more objective criteria for qualifying economic development activities. Additionally, certain community development grants would be subject to expanded documentation requirements to ensure the funds are used for qualifying purposes. For example, large financial institutions’ community development grants would be subject to a 15 percent cap on recipients' indirect costs and enhanced documentation requirements to ensure funds directly support qualifying purposes.
   
• Expanded Geographic Assessment Area: The proposal would permit financial institutions to receive CRA consideration for qualifying community development activities conducted outside their designated assessment areas, provided they first demonstrate that community development needs within their own assessment areas have been adequately addressed. The agencies propose both quantitative and qualitative standards for determining whether this requirement has been satisfied. 
   
• Strategic Plan Option: The proposal would retain the CRA strategic plan option while streamlining the approval process. Financial institutions operating under a strategic plan would be required to establish measurable goals for lending, investments, and services. The proposal would clarify plan content requirements, modernize public input processes during plan development, and ensure compliance with new review procedures.
   
• Assessment Areas: The proposal would largely preserve the existing assessment area framework while providing additional clarification regarding how assessment areas should be delineated. It would also establish a specialized framework for military financial institutions, allowing qualifying institutions to designate the entire United States as a single assessment area to reflect their nationwide customer base. 
   
• Data Collection and Reporting: The proposal would expand CRA data collection and reporting requirements for large financial institutions while reducing reporting requirements for small and intermediate financial institutions. In addition to continuing existing annual reporting obligations, financial institutions would be required to collect additional information regarding community development loans, investments, grants, and, where applicable, consumer lending. The proposal would also require expanded documentation for certain community development grants to promote greater transparency and consistency in CRA evaluations.  

For more information concerning this topic, please contact Christopher R. Rahl or Peri L. Schuster.  

Contact Peri L. Schuster | 410-576-4005

Contact Christopher R. Rahl | 410-576-4222

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