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Making Loans to Illegal Aliens

Answered by: 
Lucy Griffin

Question: 
I ask this with no small amount of trepidation, but I must know, is there a law or reg which specifically addresses making loans to illegal aliens? Not one person I've spoken with can answer the question. I've always assumed it wasn't possible.
Answer: 

While I'm not aware of any specific laws or regulations that prohibit it, we are in a new world with CIP. Essentially with CIP, you would (must, actually) find out that the customer is an illegal alien. If you make the loan, it seems to me that you are straying outside the territory of legality. I certainly wouldn't recommend making such a loan. Besides, there are safety and soundness considerations. How are you going to collect on the loan if the customer moves to another country -- and even denies ever having been here?

First published on BankersOnline.com 2/23/04

First published on 02/23/2004

Filed under: 
Lending
Filed under lending as: 
CIP
Loans

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