“When a borrower’s income is derived from employment that is not legally authorized, the source of repayment may be less reliable and may present increased credit risk,” the OCC, FDIC, and NCUA said in the joint statement.
No new lending rules were imposed. The guidance does not impose new requirements or outright prohibit banks and credit unions from lending to such borrowers. Instead, it reminds them of their existing obligations.
What this means for ITIN lending
The sharpest pressure falls on the small but closely watched market for Individual Taxpayer Identification Number (ITIN) loans — non-qualified mortgage products issued to borrowers without a Social Security number.
Most ITIN holders are unauthorized immigrants, according to the Urban Institute, which estimated approximately 5,000 to 6,000 ITIN mortgages were originated in 2023, against a backdrop of roughly 4.6 million total originations that year, per the National Community Reinvestment Coalition.
Monday’s guidance explicitly incorporates the Consumer Financial Protection Bureau’s (CFPB) June 8 Statement on Ability to Repay and Immigration Status, which flagged ITIN use as a potential indicator of unlawful presence.