New Guidance on Undocumented Workers

Federal banking regulators recently issued guidance directing banks to apply heightened underwriting scrutiny to applicants who lack authorization to work in the U.S. The guidance also requires banks to apply those same underwriting factors to every applicant, regardless of citizenship status, leaving institutions to implement heightened scrutiny without triggering fair lending violations.

Polsinelli shareholder and former OCC enforcement lawyer Travis Nelson breaks down what the guidance requires, where fair lending risk surfaces during implementation, and the one standard every underwriting decision needs to meet.