Maryland Legal Alert for Financial Services
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.