Bank regulators issue guidance on credit risk for unauthorized workers

“Similar to the CFPB guidance, the agencies continue to phrase their statements as reminders of existing obligations, as opposed to specific new requirements,” said Kris Kully, a partner at Mayer Brown. 

Kully noted that an addition in the interagency statement is the discussion of portfolio and concentration risk. 

“While the CFPB’s guidance related to the requirements to determine an applicant’s ability to repay (ATR) addressed individual credit risks, this interagency guidance poses whether certain geographic areas, employers, or industries may be particularly susceptible to ‘credit deterioration’ due to immigration enforcement and other factors,” she said.

“The federal agencies are dutifully following the president’s orders to examine potential risks to the financial system of institutions that provide banking or credit services to individuals who may be subject to removal,” Kully said.