Committee debates adding citizenship and immigration status to Vermont housing and public-accommodations protections; lenders and landlords carve-outs discussed

Legislative counsel Cameron Wood told the Vermont Senate Economic Development Committee on Oct. 12 that the bill originally introduced in the House as H.169 would add “citizenship and immigration status” to the list of protected classes for both public accommodations and unfair housing practices, and portions of that language are now under consideration as an amendment in the Senate housing bill, S.127.

The change would add the two classifications across several subdivisions of the state’s unfair-housing and public-accommodations provisions, Wood said, and the draft being discussed also includes caveats aimed at financial institutions and federal-program compliance. “The bill that was introduced would add citizenship and immigration status into the protected classes for both public accommodations and unfair housing practices,” Wood said.

The central policy questions before the committee concern two tensions: whether banks and other lenders may be permitted to consider an applicant’s immigration status when making credit decisions, and how landlords should be allowed to validate applicants’ identities without effectively excluding people who do not have Social Security numbers.

To address the banking issue, Wood described a drafted carve-out (subsection e) intended to avoid putting state law in conflict with federal practice. The proposed language says, in part, that “for the purposes of that subdivision, it shall not constitute a law of discrimination for a lender to consider a credit applicant’s immigration status to the extent such status is bearing on the lender’s rights and remedies regarding loan repayment,” Wood said. He added that, under federal law and the Equal Credit Opportunity Act, financial institutions may take immigration status into account in some credit decisions and that the carve-out is meant to make the state provision workable in practice.

Committee members pressed on who would carry the burden of proof in complaints: whether an individual alleging discrimination would have to show disparate treatment or disparate impact, and then whether the lender would be required to justify its decision. Wood said an individual would first bring a complaint to the Vermont Human Rights Commission; if a complainant showed discrimination on its face or disparate impact, a lender would then need to show that its practice was not unlawful in the particular factual context.

On tenant screening, Wood said the Senate committee removed language from the original draft that would have prohibited landlords from requesting Social Security numbers; instead, the proposed amendment would require landlords who conduct background or credit checks to accept any of several forms of identification, including a nonexpired government-issued ID or an Individual Taxpayer Identification Number (ITIN). “In order to conduct a background or credit check, a landlord shall accept any of the following: an original or a copy of a nonexpired form of government-issued identification and individual taxpayer identification number,” Wood said while explaining the provision.

The draft also contains a fall-back clause inserted by the House General Committee to account for future federal requirements: it would permit verification of immigration status or “differential treatment on the basis of citizenship or immigration status” if required by federal law or federal funding conditions (for example, certain federal housing programs such as Section 8 that currently tie eligibility to lawful presence), Wood said.

Members repeatedly raised federal preemption and criminal-liability concerns. Wood warned that without the lender carve-out the state could face preemption arguments — that banks might defend practices as authorized by federal law — and that courts would need to resolve conflicts. He also noted federal criminal statutes (8 U.S.C. § 1324) on harboring and related offenses and summarized circuit court guidance that merely renting to an undocumented person, without other conduct intended to conceal or facilitate continued presence, generally has not been held to constitute a federal harboring offense.

No formal committee vote was recorded during the discussion; one committee member said members were “generally supportive” of the concept while continuing to seek clarity on how the language would operate in practice. The discussion will feed into Senate Economic Development’s consideration of whether to adopt the amendment into S.127; H.169 remains active in House committees where portions of the same language have already been incorporated.

Why it matters: If enacted, the changes would expand state protections in housing and public accommodations to include citizenship and immigration status while also creating statutory clarifications and exceptions that aim to reconcile state protections with federal lending rules and federal-program conditions. The provisions could affect landlords’ screening practices, lenders’ underwriting and the Human Rights Commission’s caseload and interpretations.