US Agencies Issue Guidance on Lending to Non-Work-Authorized Individuals
OCC, FDIC and NCUA jointly issued guidance reminding supervised institutions of existing credit risk management obligations when lending to individuals not legally authorized to work in the US.
The joint agency guidance clarifies supervisory expectations around credit risk, documentation, and compliance when extending credit to non-work-authorized individuals. It signals heightened scrutiny of underwriting practices and may prompt reassessment of loan portfolios and customer due diligence procedures.
Directly impacts consumer lending policy, underwriting, and BSA/AML alignment across US banks and credit unions.
Action Required
Review consumer lending policies, underwriting standards, and BSA/AML controls for exposure to borrowers lacking US work authorization.
Coordinated interagency guidance signals a shift in supervisory posture with immediate operational implications for lenders.
Assess consumer lending book for exposure to non-work-authorized borrowers; update underwriting, KYC and documentation standards to align with joint agency expectations.
“The OCC, FDIC, and NCUA issued guidance to remind supervised financial institutions of their existing obligations with respect to credit risk management when lending to individuals not legally authorized to work in the United States.”