The Trump administration is planning to release a policy statement that will tell banks they may consider a client’s immigration status as part of their ability to repay when offering mortgages and credit cards, FOX Business has learned.

The Consumer Financial Protection Bureau (CFPB) is planning to issue a policy statement on Friday in the Federal Register that serves as a guidance for financial institutions in considering a consumer’s ability to legally work and earn income in the U.S. when making lending decisions, particularly when considering mortgage and credit card applications.

The policy statement, which was viewed exclusively by FOX Business, notes that it doesn’t have the force of law and isn’t legally binding and instead serves as a guidance to remind lenders of factors including immigration status that they may consider when extending credit to consumers.

“The Truth in Lending Act and its implementing Regulation Z require creditors to assess consumers’ ability to repay before offering mortgages and certain open-end credit products,” the CFPB’s policy statement said. “This statement emphasizes to creditors that these requirements may obligate consideration of a consumer’s immigration status, especially where removal from the U.S. may disrupt the consumer’s income.”

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The CFPB’s statement reminds banks that they may be obligated to consider immigration status in lending decisions if it may affect a borrower’s ability to repay. (David Paul Morris/Bloomberg via Getty Images)

“The obligation arises if documentation in the consumer’s application or other records indicates that the consumer’s repayment ability will change on account of their immigration status,” the CFPB said. 

“In such a circumstance, a creditor must consider that information, just as they must consider anything else in the application or records at or before consummation indicating that there will be a change in a consumer’s repayment ability after consummation.”

“A failure to do so would overlook key information regarding the consumer’s income, and may risk the creditor failing to reasonably assess the consumer’s ability to repay the credit sought,” it added.

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Financial institutions may consider immigration status as a factor in the ability to repay a mortgage loan or a line of credit for a credit card, the CFPB’s statement emphasized. (iStock)

The CFPB’s policy statement noted as an example that a financial lender may regard a credit applicant who doesn’t have legal authorization to be present in the U.S. or work in the country as “being subject to removal, in light of the Administration’s stated policy of removing any person unlawfully present in the U.S.”

That information can be derived from either a direct inquiry or from the consumer’s reliance on “atypical identification methods, such as an Individual Taxpayer Identification Number (ITIN), typically issued to taxpayers… who lack proof of legal residency.”

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The policy statement issued by the Consumer Financial Protection Bureau (CFPB) doesn’t have the force of law. (Anna Moneymaker/Getty Images)

CFPB said in the document that it “expects compliance with the law and failure to account for such a reasonably expected change in income may not comply with a creditor’s obligation to reasonably assess a borrower’s ability to repay the loan or line of credit sought.”

It also noted that there are a range of lawful immigration statuses under U.S. law and added, “Assessing how each status might bear on a lender’s reasonable expectation that a consumer has the ability to repay an obligation with U.S.-based employment income is varied, and it cannot be assumed that consumers with different lawful statuses have identical abilities to repay.”

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As a result, the CFPB isn’t providing a comprehensive analysis of how the reasonable expectation of a consumer’s ability to repay may vary based on immigration status, and instead reminds creditors of when future changes in borrower income must be considered under Regulation Z.

This comes as the San-Francisco based firm is at the receiving end of the Indian government over an issue of blocking and unblocking certain handles tweeting about farmer protests.

Sources said that the executive — who continues to lead the conversations with the government — Mahima Kaul’s stepping down is not related to the recent controversy.

Monique Meche, VP, Public Policy, Twitter said in a statement “At the start of this year, Mahima Kaul decided to step down from her role as Twitter Public Policy Director for India and South Asia to take a well-deserved break. It’s a loss for all of us at Twitter, but after more than five years in the role we respect her desire to focus on the most important people and relationships in her personal life.” Kaul will continue in her role till the end of March and will support the transition, Meche added.

“The Public Policy team acts as Twitter’s ambassadors to government policymakers, regulators, and civil society groups on public policy issues. We focus on addressing issues such as advocating for an Open Internet, freedom of expression, privacy, online safety, net neutrality, and data protection to advance the interests of Twitter and our customers. In addition, we serve as the #TwitterForGood team and provide guidance, resources, and support for Twitter’s Corporate Social Responsibility mission,” the company said in its job description on LinkedIn.

“As Twitter’s public policy lead based in India, this you’ll drive and assist development and advocacy of public policy solutions to pressing high technology issues. Specifically, you will manage and build a team of public policy and philanthropy specialists to protect and advance Twitter’s interests in India, it added among other key performing areas.