Consumer loans to individuals without credit scores, a proxy for undocumented immigrants, have decreased by more than 70% since 2024, and an additional 40% in 2026, according to a report from dv01, a Fitch Group subsidiary. This trend is attributed to the Trump administration's intensified immigration crackdown, leading many immigrants to avoid traditional banking services and store cash at home due to fear of deportation or financial penalties. Lending in high-concentration areas for this group, such as auto loans and credit cards, is projected to be around $7.2 billion in 2026, a significant drop from approximately $37 billion in 2024.
Immigration lawyers, such as Jennifer Oltarsh in New York, report that their clients are fearful and withdrawing money from banks, choosing instead to keep cash at home. This fear is exacerbated by recent government actions, including the revocation of protections for individuals from countries like Haiti and Venezuela, and concerns that banks might share information with the Department of Homeland Security. Additionally, new regulations from the Treasury Department's Financial Crimes Enforcement Network (FinCEN) and the Consumer Financial Protection Bureau (CFPB) advising lenders to consider immigration status have made banks more cautious.
The decline in lending is not solely due to lenders' increased caution; some of the initial drop-off may have come from immigrants themselves. The dv01 report, based on Equifax Market Pulse data, suggests that lenders are reducing exposure to these borrowers amid changes in the political and policy environment. Advocacy groups like UnidosUS and the National Immigration Law Center highlight that these regulations primarily serve as a tool to instill fear within immigrant communities, affecting their access to financial services and overall economic stability. The case of Yobania, a Nicaraguan immigrant, illustrates the severe impact, as her family's disability benefits were suspended, and her husband lost employment opportunities after an ICE raid, leaving them unable to secure loans and maxing out their credit card.
