House committee debates H.169 rules on Social Security numbers and immigration status for housing and lending

The Vermont House General and Finance Committee on April 15 took up H.169, a bill that would restrict when landlords and lenders may require Social Security numbers and would add citizenship and immigration status as protected classes for housing and public accommodations.

Representative Dodge, chair of the House General and Finance Committee, opened the committee discussion by saying he wanted to present concepts and options rather than legal text and to “start where this bill starts in its current form, which is what forms of identification are gonna be required.” He proposed three concepts: clarify the information landlords may collect to process rental applications (name, date of birth, prior rental history), require landlords to accept either a Social Security number or other government-issued identification, and require landlord application forms and communications to state that either option is adequate.

The committee’s discussion focused on enforcement and practical effects. Dodge read a draft concept saying, in part, that “a Social Security Number may not be required except if required by federal law,” and that landlords should continue to be able to obtain the basic identifying information necessary for credit and background checks. He said the practical target of the bill, if enacted, would be landlords who want to rent but assume they cannot because applicants lack Social Security numbers; the aim is to change application forms and communications so landlords know alternate government IDs are acceptable.

Committee members and witnesses flagged three linked concerns: whether the state language could be preempted by federal law, how lenders (not just landlords) would comply given federal rules and secondary-market practices, and whether adding immigration status to protected classes would expose banks or other creditors to litigation.

Chris Stelier, president of the Vermont Bankers Association, advised that tax or identification numbers used for loan underwriting (including individual taxpayer identification numbers, or ITINs) appear different on tax forms and are detectable by banks, saying it “would be different” (referring to how an ITIN looks on a tax return). Committee counsel and other staff cited federal authorities that permit, and in some contexts require, creditors to inquire about immigration or residency status for underwriting and customer-identification purposes. The committee reviewed 42 U.S.C. § 1981, the Equal Credit Opportunity Act and implementing regulations (cited in discussion as 12 C.F.R. provisions and Regulation B), and repeated concerns that secondary-market purchasers such as Fannie Mae and Freddie Mac may restrict loans that cannot be documented as originating from borrowers lawfully present.

Committee counsel outlined three drafting approaches for lenders: (1) add a plain prohibition on discrimination by immigration or citizenship status and leave other practices unsaid; (2) bar asking about immigration status (staff advised against this because federal rules expressly permit such inquiries and it risks preemption); or (3) allow consideration of immigration status only insofar as it bears on the borrower’s ability to repay (for example, where resale to secondary markets makes underwriting requirements material). Staff and several committee members said the first or third approaches are most politically and legally viable.

Participants cited examples and existing state models. Staff referenced statutes in Washington and California that add citizenship or immigration status to fair-housing or civil-rights protections while expressly preserving compliance with federal law. Committee members also noted recent federal agency guidance and SBA policy changes as illustrative of current federal practice.

No formal vote occurred. The committee concluded by asking staff to produce a revised draft that more clearly states what landlords may do, preserves protections where federal law does not mandate otherwise, and addresses lender concerns about federal requirements and loan resale. Committee staff member Cameron agreed to draft revised language and consult with legal counsel (including Maria Royal) before returning to the committee. The committee scheduled remaining hearings and noted it would review the next draft at a future meeting.