Trump administration pushes banks to treat loans to undocumented immigrants as riskier

U.S. bank regulators have issued joint guidance urging lenders to reassess how they manage credit risk tied to unauthorized borrowers, reinforcing the Trump administration’s push to treat such lending as potentially riskier without creating a new formal rule. The Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration said the statement applies across the institutions they supervise and serves as a reminder of existing obligations to evaluate a borrower’s willingness and capacity to repay. The move follows a May executive order from President Donald Trump directing regulators to address the use of the financial system by unauthorized immigrants. The guidance does not set specific metrics, timelines or detailed compliance benchmarks, leaving banks and credit unions to interpret how to adjust underwriting and risk controls. That ambiguity could lead some lenders to pull back from certain loans, while others may tighten documentation and verification requirements, potentially slowing credit access and raising compliance costs. Critics say the policy could chill banking access more broadly and push some activity outside the regulated system. Data on lending to undocumented immigrants is limited, but the Urban Institute estimated that 5,000 to 6,000 ITIN mortgages were originated in 2023, compared with about 4.6 million total mortgage originations that year, according to the National Community Reinvestment Coalition. The direct effect on crypto markets appears limited, though broader caution in lending and compliance could ripple across asset markets.