A Trump administration proposal that would allow credit reports to be used in green card and other immigration reviews would make U.S. officials subject to federal credit reporting laws, opening up an unexpected area for state attorneys general to challenge the rule.
The Department of Homeland Security conducts “public charge” reviews of green card applicants’ financial conditions to determine whether they would use public benefits and not become “burdens on American taxpayers,” according to DHS Secretary Kirstjen Nielsen.
Consumer and immigration advocates have decried the use of credit scores in immigration reviews, saying the reports are inappropriate for such consequential decisions. They also see potential litigation if the U.S. Citizenship and Immigration Services becomes subject to the Fair Credit Reporting Act’s strict reporting requirements.
Democratic state attorneys general opposed to the proposal, who are likely to sue on other grounds, could sue USCIS if the agency slips up on FCRA compliance, according to Chi Chi Wu, a staff attorney for the National Consumer Law Center.
“There is a remedy for state attorneys general to bring action under the FCRA that individuals can’t,” said Wu, an expert on consumer credit reporting issues.
Public Charge Changes
Since 1999, U.S. immigration officials have considered whether a green card applicant could use “public cash assistance” or “long-term institutional care” as part of the review process.
The Homeland Security Department in September proposed a significant expansion of the types of public benefits that would be included in green card reviews. Vital programs like Medicaid and the Supplemental Nutritional Assistance Program, better known as food stamps, are now among them.
Under the proposal, immigration officials would also check applications for financial self-sustainability, defined as having income and assets of at least 250 percent of the federal poverty line, along with their English abilities and even medical histories.
“Fundamentally, this proposal suggests that the government can accurately divide people into categories of contributors and non-contributors,” Madison Hardee, a senior policy analyst and the Center for Law and Social Policy who studies immigrants’ access to benefits, told Bloomberg Law..
High-Stakes Credit Checks
One part of the proposed financial self-sustainability assessment is a review of applicants’ credit reports, , which the applicants themselves would provide.
USCIS has not said how much immigration agents will rely on those reports. But if they are used at all, the agency would be subjected to the FCRA, the 1970 law that governs consumer credit reporting.
The law would force immigration officials to provide green card and other applicants with “adverse action” reports explaining why a green card application was denied.
Green card applicants already receive letters when applications are denied. But the FCRA component would add additional reporting requirements for USCIS, according to a comment letter filed by the NCLC and 49 other groups.
“It does not matter if USCIS obtains the report from the consumer … instead of the credit bureau, because the adverse action notice requirements apply if an adverse action is taken ‘based in whole or in part on any information contained in a consumer report,’” the Dec. 10 letter said.
Along with the extra reporting requirements, USCIS would also be subjected to FCRA privacy and data protection requirements.
Consumer and immigration advocates say they oppose the use of credit reports in the proposal because many immigrants don’t have credit reports.
“To place something as problematic as a classic FICO score into the center of who gets access to the American dream and who doesn’t is completely unconscionable,” said Scott Astrada, the Center for Responsible Lending’s federal policy director.
Credit reports often provide an incomplete picture of a person’s financial condition and aren’t indicative of whether the person will receive public benefits, Wu added.
If a person disputes a charge and elects not to pay it, the failure to pay ends up on a report until the dispute is resolved. Sudden medical expenses could harm a person’s credit.
Using credit reports to determine whether an immigrant could receive food stamps, Medicaid or Section 8 housing vouchers in the future would be a problem, Wu said.
Credit reports also contain many errors, consumer advocates say.
Credit reports are the subject of the highest number of complaints on the Consumer Financial Protection Bureau’s public complaint database. The CFPB lists around 180,000 complaints related to “credit reporting, credit repair services or other personal consumer report” and an additional 140,000 complaints under the heading “credit reporting” on its public consumer complaint database as of Dec. 20.
Those complaints include erroneous information, payments not being credited, and problems with investigations into mistakes.
Green card applicants would not be able to dispute application decisions based in part on erroneous credit reports under the FCRA. They would have to contact the credit bureaus to get the errors fixed, which can be an arduous process.
State attorneys general can take action if they see a pattern of problematic credit reports being used in part to deny green card applications, Wu said.