U.S. banking agencies issue lending risk guidance on unauthorized workers

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US banking lending risk guidance

Highlights

On July 13, the OCC, FDIC, and NCUA issued joint guidance reminding banks to apply prudent credit risk management practices when lending to non-work authorized borrowers.
The agencies highlight that employment authorization uncertainty impacts income stability, repayment sustainability, collateral recovery, and overall credit risk, extending guidance to community banks.
Lenders must factor risks tied to non-work authorized borrowers into underwriting and compliance, aligning with CFPB's June 8, 2026 ability-to-repay statement and relevant consumer protection laws.

Interagency guidance outlines underwriting expectations

As reported by the Office of the Comptroller of the Currency, the OCC, Federal Deposit Insurance Corporation and National Credit Union Administration issue joint guidance on July 13 reminding supervised institutions to apply existing safe-and-sound credit risk management practices when lending to non-work authorized borrowers.

The agencies say banks and credit unions should continue to assess a borrower's willingness and ability to repay under the terms of a credit obligation. That includes reviewing the source of repayment, repayment capacity, overall financial condition, available resources and willingness to meet the obligation as agreed.

The bulletin says uncertainty around employment authorization can affect income stability, the sustainability of repayment, collateral recovery and other factors tied to credit risk. It also states that the guidance applies to community banks.

Compliance implications for lenders

The agencies expect financial institutions to incorporate risks tied to non-work authorized borrowers into underwriting, account management, credit classification, allowance analysis and compliance processes, while remaining consistent with applicable consumer protection laws.

The guidance also points lenders to the Consumer Financial Protection Bureau's June 8, 2026 statement on ability to repay and immigration status. That statement reminds creditors of obligations under the Truth in Lending Act and Regulation Z, as well as the Equal Credit Opportunity Act and Regulation B.

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