US Regulators Urge Banks to Assess Credit Risks Tied to Undocumented Immigrants

The Trump administration signed Executive Order 14406 in May 2026, directing officials to assess the risks that lending to undocumented immigrants poses to the financial system. The policy seeks to address the difficulty banks face in assessing repayment capacity and recovering collateral when borrowers without legal authorization to work experience high employment volatility. The measure is intended to align lending oversight at US financial institutions with the federal government’s tighter immigration policies.

The Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration jointly issued guidance on July 13, 2026, advising financial institutions to factor borrowers’ immigration status and employment volatility into lending risk assessments. The guidance does not directly prohibit loans to undocumented immigrants, but requires banks to strengthen credit risk management while continuing to comply with the Equal Credit Opportunity Act to prevent discrimination.