Regulators Signal Banks to Tighten Lending to Undocumented Immigrants

U.S. banking regulators withdrew an anti-discrimination policy in January and issued new guidance on July 13 treating loans to undocumented immigrants as higher risk. The shift removes explicit legal cover while signaling examiners expect stricter underwriting standards. Banks typically over-comply with regulatory guidance before formal rules, pressuring compliance teams to tighten lending despite no mandate.