Judge Challenges Trump-Era EB-5 Rule Changes which could Lower Investment Amount Requirements

EB-5 program changes that make it more difficult to garner foreign investment could soon be reversed by U.S. Magistrate Judge Jacqueline Scott Corley.

Despite the Biden administration’s defense of the Trump-era rule change that raised the EB-5 visa program’s minimum investment amounts from $1 million to $1.8 million and increased the minimum amount in targeted employment areas from $500,000 to $900,000 – the rule has largely been rejected by Judge Corley. The rejection and subsequent proposed abolishment of the changes are based on the illegitimate appointment of acting Homeland Security secretaries in 2019, which has been perpetuated by the lawsuit Corley is overseeing brought by Behring Regional Center, who sued the government in December 2020 in response to the rule change.

In early May, Corley stated that she doesn’t think the new U.S. secretary of Homeland Security can approve the rule made by Trump’s unlawfully appointed former acting secretary, calling the unlawful appointment of former acting DHS secretary Kevin McAleenan under the Trump administration as “pretty well established”. The proposed EB-5 Modernization Rule was initially issued in July 2019 under McAleenan, with the final rule being issued on Nov. 21, 2019 under acting DHS secretary Chad wolf, who filled McAleenan’s position after his resignation. Judge Corley summarized her understanding of the Federal Vacancies Reform Act – which limits who can serve in an acting role plus the length of time they can serve – and does not support the former acting secretary’s changes to EB-5 visa investments. Ultimately, Corley said the Federal Vacancies act did not give him authority to sign the rule change.

The rule change in question raised the program’s investment amount to $1.8 million while also increasing the minimum amount in a targeted employment area – a high-unemployment or rural area – from $500,000 to $900,000. In addition, the rule change prevents U.S. cities and towns with a population of 20,000 or more within a metropolitan area from being categorized as targeted employment areas – even if they suffer from high unemployment. Furthermore, states were no longer able to participate in the designation of targeted employment areas under the rule change. In response to the rule change, Behring Regional Center, a USCIS accredited EB-5 regional center, sued the government in December 2020.

Based on the unlawful appointment of former acting DHS secretary, Judge Corley challenged the U.S. Department of Justice attorneys repeatedly to justify why she should not grant summary judgement to Behring Regional Center, which would end the EB-5 rule change. Judge Corley stated the issue is “the wrong person took the position of the secretary”. While DOJ attorney August Flentje called McAleenan’s actions ‘delegatable,’ Judge Corley stated it was not her reading of the act and concluded without issuing a ruling that it is “just a matter of statutory interpretation.” Todd Alexander Pickles of Greenberg Traurig LLP, who represented Behring, lauded Judge Corley’s interpretation of the statute, saying she “hit the nail on the head.”

The results of the hearing show promising signs that the EB-5 program could soon be restored and as active as it once was. If the rule is blocked, the minimum EB-5 investment of $500,00 would be reinstated and restrictions on targeted employment area designations would be lifted, making it a much more desirable path for foreign investors to attain citizenship in the United States. U.S. Immigration Fund, a leading USCIS accredited regional center, will continue to report updates.

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