If in the course of taking a loan application it is determined that the applicant is not a documented citizen of the United States. They are working but are undocumented. Does ECOA apply? I'm asking this incase this should happen. To date it has not.

Like anything else - it is all or nothing. You can't treat two similar applicants differently. However, you do have this:

Paragraph 6(b)(7)

1. National origin—immigration status. The applicant's immigration status and ties to the community (such as employment and continued residence in the area) could have a bearing on a creditor's ability to obtain repayment. Accordingly, the creditor may consider immigration status and differentiate, for example, between a noncitizen who is a long-time resident with permanent resident status and a noncitizen who is temporarily in this country on a student visa.

2. National origin—citizenship. A denial of credit on the ground that an applicant is not a United States citizen is not per se discrimination based on national origin.

ECOA would apply, because they are an applicant, and applicants have to be treated consistently.


1002.6(b)7 indicates (7) Immigration status. A creditor may consider the applicant's immigration status or status as a permanent resident of the United States, and any additional information that may be necessary to ascertain the creditor's rights and remedies regarding repayment.

Commentary
Paragraph 6(b)(7)
1. National origin—immigration status. The applicant's immigration status and ties to the community (such as employment and continued residence in the area) could have a bearing on a creditor's ability to obtain repayment. Accordingly, the creditor may consider immigration status and differentiate, for example, between a noncitizen who is a long-time resident with permanent resident status and a noncitizen who is temporarily in this country on a student visa.

2. National origin—citizenship. A denial of credit on the ground that an applicant is not a United States citizen is not per se discrimination based on national origin.

There would be no way to run a credit check without a SS# or W8-BEN, am I right?

Would you be denying them because you can't run credit or because they aren't a citizen or because they are in the country illegally? All three of these reasons are acceptable under ECOA as long as they are applied consistently, but ECOA most certainly applies.

Yes, these would be the reasons. Thank you.

Check to see if you have a state law that is broader than Reg B. In CA, we have the Unruh Act. California’s Unruh Civil Rights Act (Civil Code Section 51) prohibits discrimination based on citizenship, immigration status and primary language. As a result, if the Bank relies on Regulation B Section 1002.6 and its commentary to condition or restrict a loan based on an applicant’s citizenship or immigration status it could be found to violate the Unruh Act.

Thanks for your reply.

What TryingtoComply said. Wells Fargo is currently being sued for violation of the UNRUH act.

To top it off, the wonderful legislature in CA passed a resolution this year that the MLA is violation of the Unruh Act as it requires the a SSN to determine military benefits, due to the fact not all immigrants have a SSN.

You mean the military as whole and not the MLA? You have to have a SSN to enlist, regardless of whether you are an immigrant or non-immigrant.

"By requiring lenders to ask for a social security number in order to meet the safe harbor provisions of the MLA"

So, you have a borrower sitting in front of you that says they don't have a SSN and you believe them. What do you need a safe harbor under the MLA for?? Without a SSN they cannot possibly be in the military. Dependent without a SSN - one in 10 million maybe. I guess I don't understand their point.

The issue we are running into (we are also located in California) is we have borrowers who are under the DACA (Deferred Action for Childhood Arrivals) which means though they are protected from deportation, they are not deemed "lawfully" in the country. Under the Unruh Civil Rights Act it states you cannot discriminate based on national origin. When we're processing the application, the program itself disqualifies a borrower if they are a Non-U.S. Person. We aren't discriminating based on their origin, we're having to decline because the loan program will not lend to Non-U.S. People, and we don't service loans. I believe we are still covered under ECOA and especially in this instance, not discriminating based on their national origin. Any thoughts?