EB-5 Proposed Regulations: A Missed Opportunity, Next Steps for Reform

It is not surprising that the long and winding road to EB-5 reform once again took a detour. Since February 2, 2016, when the Senate Judiciary Committee held its first hearing on EB-5 reform, Chairman Charles Grassley (R-IA) and Ranking Member Patrick Leahy (D-VT) of the Senate Judiciary Committee had been pressing the U.S. Department of Homeland Security (“DHS”) to issue regulations addressing Target Employment Area (“TEA”) reform and other important aspects of the EB-5 Program.

In response, USCIS announced in April 2016 that it would be issuing proposed regulations. After repeated delays, USCIS finally issued proposed regulations on January 13, 2017 (the “Proposed Regulations,” also sometimes referred to as “these regulations”), nearly one year after the first Senate hearing and merely 7 days before the beginning of the Trump administration. Key Program participants swiftly criticized the portion of these regulations that would increase the minimum investment amounts to levels that far exceed those that have been proposed by Congressional reformers, and would narrow the TEA definition.6 Based on recent precedent, USCIS should have anticipated that the new administration would impose an order to freeze all new or pending regulations, as was done within hours of President Trump taking the oath of office.