Office buildings in Manhattan, New York [UPI=Yonhap News file photo]

U.S. financial regulators have instructed banks to raise the threshold for loans to undocumented immigrants, The Wall Street Journal (WSJ) reported on the 13th (local time).

According to the report, bank supervisory authorities, including the Office of the Comptroller of the Currency, recently released new guidelines on retail lending that urge banks to consider loans to undocumented immigrants as a potential risk factor.

Under current law, U.S. banks are required to maintain sound lending practices to ensure the stability of the financial system and prevent their own insolvency.

While the latest guidelines from the authorities do not change the existing underwriting standards, they explicitly state the reasons why loans to workers without legal employment authorization could become high-risk.

In particular, the authorities warned that a borrower's ability to repay loans could be affected if they face potential deportation or are terminated by their employer due to a lack of legal work authorization.

Although it is not illegal for U.S. banks to open accounts or provide loans to undocumented immigrants, the WSJ noted that these new guidelines could discourage banks from offering financial services to this population.

The newspaper further reported that U.S. financial regulators had previously been pressuring financial institutions and credit card companies to re-evaluate the risks associated with providing credit cards or mortgage loans to undocumented immigrants.