U.S. Banking Regulators Release Joint Guidance on Loans to Undocumented Workers

July 16, 2026 - 01:15

On July 13, 2026, the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and National Credit Union Administration issued a joint statement clarifying how banks and credit unions can offer loans to individuals who are not legally authorized to work in the United States.

The guidance aims to remove legal uncertainty for financial institutions that want to serve this population. Regulators emphasized that federal banking law does not prohibit lending to someone based solely on their immigration status. As long as the borrower can demonstrate an ability to repay, banks may consider alternative forms of identification, such as a foreign passport or consular ID, to verify identity.

The agencies noted that lending to this group can help bring more people into the formal banking system, which supports financial stability and safety. They also reminded institutions that existing anti-money laundering and customer due diligence rules still apply. Lenders must follow all applicable consumer protection laws, including fair lending requirements.

Some community banks have already started offering small-dollar loans and secured credit cards to undocumented immigrants. The new guidance is expected to encourage more institutions to enter this market. However, the statement also warned that lending decisions must be based on creditworthiness, not on a blanket policy of excluding all undocumented applicants.

The regulators stopped short of requiring any specific reporting or verification of immigration status. They said each institution should develop its own policies based on risk tolerance and legal advice. The guidance does not change any underlying immigration law, but it clarifies that banking regulators see no federal barrier to serving this customer base.