Recently, the National Credit Union Administration (NCUA), in conjunction with Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC), published joint guidance meant to address the requirements of Executive Order 14406: “Restoring Integrity to America’s Financial System.”
President Donald Trump issued this executive order on May 19, 2026, and, as part of the order, required financial institutions, including credit unions, to address particular lending practices. The jointly published guidance is a result of that order.
According to the terms of the guidance, financial institutions, including credit unions, are reminded that “lending to individuals who are not legally authorized to work in the United States may present elevated credit risk…” In particular, the guidance emphasizes that the potential borrower’s ability to “generate income, maintain employment and remain financially stable may be subject to greater uncertainty.” Financial institutions are encouraged to implement adequate measures to mitigate risks through safe and sound underwriting practices that assess a potential borrower’s willingness and capacity to repay according to the terms of the credit obligation.
The guidance goes on to say that, when lending to non-work authorized borrowers, “financial institutions should consider whether uncertainties related to employment authorization may affect the stability and sustainability of income, repayment capacity, collateral recovery, or other factors relevant to credit risk.” The guidance suggests that financial institutions address these concerns in each underwriting consideration, including:
The guidance was published shortly after the Consumer Financial Protection Bureau (CFPB) had issued similar guidance, reminding creditors of their obligations under the Truth-in-Lending Act (TILA). Both the CFBP and the NCUA noted that creditors should, prior to lending to consumers for dwelling secured transactions such as mortgages, make “a reasonable and good faither determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms.” The parameters for the “reasonable and good father determinations of a customer’s ability to repay” are found in Regulation Z, which implements TILA.
It’s important to note that the guidance highlights that creditors are able to take a potential borrower’s immigration status into account when making credit determinations. Additionally, a creditor may also consider the potential borrower’s immigration status or status as a permanent resident of the United States, and “additional information that may be necessary to ascertain the creditor’s rights and remedies regarding repayment.”
Credit unions are encouraged to review policies, procedures, including underwriting practices, to ensure proper risk mitigation as detailed by the issued guidance.
The guidance was published on July 13, 2026.
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