Q: Are There Rules for Lending to a Non-Resident Alien? 

A: No. No specific rules exist, but there are some related rules and additional considerations. 

Lending to a non-resident alien is generally a matter of a bank’s loan policy and making a business decision. From a regulatory standpoint, a bank should also consider The Fair Lending Act and the Equal Credit Opportunity Act (ECOA) in addition to some practical matters. 

The Fair Lending Act prohibits discrimination based on race, color, national origin, religion, sex, familial status, and disability. It does not include immigration status. However, Federal regulators have found Fair Lending violations based upon results, rather than active discrimination. Meaning, a bank should be cautious when evaluating non-resident aliens to ensure its decision is not based on a prohibited basis following a factor potentially related to immigration such as national origin. 

ECOA, implemented by Regulation B, indicates in 1002.6(b)(7) that a creditor may consider the applicant's immigration status or status as a permanent resident of the United States, and any additional information that may be necessary to ascertain the creditor's rights and remedies regarding repayment. 

The commentary to that section provides: 

The applicant's immigration status and ties to the community (such as employment and continued residence in the area) could have a bearing on a creditor's ability to obtain repayment. Accordingly, the creditor may consider immigration status and differentiate, for example, between a noncitizen who is a long-time resident with permanent resident status and a noncitizen who is temporarily in this country on a student visa. 

Thus, a denial of credit on the ground that an applicant is not a United States citizen is not per se discrimination based on national origin. 

So, a bank may consider immigration status from a repayment standpoint. A bank will need to consider its loan policy, which should address practical considerations as well, such as: does the bank have jurisdiction over this individual? If they are not a U.S. citizen, would the bank be able to initiate proceedings against them? Are they a flight risk? What if their plans change and they return to their country of origin? Will the bank be able and willing to pursue them if the loan goes bad?