Question & Answer

Question: We just received an application from a foreign citizen. How do we consider legal issues relating to citizenship without discriminating on the basis of national origin?

Answer: It is important to distinguish between citizenship and national origin. The concept of national origin discrimination should be construed as broadly as discrimination based on race or color. It is a prohibition designed to get at prejudice that may be based on differences such as culture that are as pervasive as those based on race or color. It operates without any dependence on citizenship. For example, an American citizen is protected from discrimination because of their national origin just as a resident alien is.

When underwriting a loan application from a non-citizen, the lender should look at two aspects. First, look at the qualifications of the applicant, just as you would for an application from a citizen. Second, consider the bank's legal remedies. You may need to know whether any laws from the applicant's country affect the transaction. If you have questions about that, ask your counsel.

Copyright © 1998 Compliance Action. Originally appeared in Compliance Action, Vol. 3 , No. 5 & 6, 4/98