Comment: Two EB5 Lapses USCIS May Return 526 Petitions

The EB5 industry harbors the beliefs that (1) there is one EB5 lapse - that of reauthorization of the RC program and (2) USCIS will hold 526 files in abeyance during this lapse. Both these beliefs may be mistaken. 

On the EB5 lapse, USCIS badly wants its November 2019 modernization regs back - USCIS regards the post-Behring vacatur to be a “lapse” of those modernization regs - so there are two EB5 lapses, not just one. And as to the Congressional lapse the industry is fixated on, there are serious political problems that we explain below.

On the abeyance that USCIS is currently holding as its policy on pending RC 526s/924s, there may well be limits to what USCIS can do/not do, and there is the possibility that USCIS may feel compelled to start denying RC-based 526s/924s, as we discuss below.

USCIS badly wants to go back to the 900K regs; DHS Secretary Mayorkas made a statement to that effect to the federal court in the Behring case. Given this clear declaration of intention, we expect USCIS to republish and reinstate the November 2019 EB5 modernization regulations again in late summer or early fall, bringing back the $900K minimum and the restrictive TEAs. The golden era of $500K EB5 will be temporary. [USCIS may not take appeal to the Behring court order, since a stay (a) might not issue and (b) will not prevent eventual loss in federal court on the merits.] 

Now lets look at the Congressional lapse - that of reauthorizing the RC program. In recent conversations with a number of EB5 industry players, it has become clear to Immigration Daily that the EB5 industry harbors several misconceptions as to what is or is not possible in Congress, and in particular, what the political lay of the land is. Here is Immigration Daily’s analysis:

  • Should the EB5 industry have consensus on what is needed from Congress, Congress will give the industry what it wants - Congress loves industry consensus in all matters before it. 
  • Consensus already exists in the EB5 industry on a number of items - the rub is on one and only one issue - TEA definition - and that issue is a life-and-death matter for both sides of the industry: rural and urban.
  • Even on TEA definition, consensus is definitely achievable IF EB5 quotas can be raised significantly, as in tripling or quadrupling or more. Such increased numbers will ensure that BOTH rural and urban interests can achieve their goals in the EB5 program, and both rural and urban players can live and thrive together in a greatly expanded industry IF EB5 quotas can be raised dramatically. 
  • Unfortunately, consensus can ONLY be reached IF EB5 quotas are raised by Congress, there is NO OTHER way that we can see to get to industry consensus on TEA definition. 
  • Raising EB5 quotas would run headlong into Congressional immigration priorities such as DREAMers, AgJOBS, H2Bs, H1Bs and many others of far greater political import than EB5. The EB5 industry has very little political muscle (even when rural and urban interests work hand in hand together) as compared to other immigration players. However, the EB5 industry has deluded itself into believing that it has far greater political influence than it actually has, and this delusion is the root cause of the industry’s predicament today. Raising EB5 quotas in 2021 is impossible in Immigration Daily’s political assessment of Congressional mood. [Raising such quotas in the longer term, such as 2025 and beyond is very much in the cards, so rural and urban interests alike will eventually live happily together, but that is not the case today.]
  • Since raising EB5 quotas is currently politically off the table, rural and urban interests in EB5 cannot be aligned - they are in a win-lose situation with respect to each other, there is no win-win possible in 2021 for the EB5 industry. Either the TEA definitions are restrictive and the rural interests win, or the TEA definitions are liberal and the urban interests win--there is no middle ground--it is winner take all. Therefore, there cannot be industry consensus on TEA definition, and therefore Congress must act on reauthorization in the face of this lack of consensus.
  • With all the above in mind, Congress can only do one of two things: (a) kick the can down the road or (b) reauthorize with integrity measures only (which apparently no one is openly opposing).


The key point is that Congressional action is unlikely until late September, so this RC lapse will last quite a while, much more than the EB5 industry was or is prepared for. Please bear in mind that we have the good fortune and/or misfortune of being 100% right on our Congressional forecasts on EB5 for the past 10 years--though past performance is not a guarantee that we will be proven right in this instance. 

To take these two lapses together - that is the reauthorization lapse and the modernization regs lapse together - the $500K Direct EB5 market may well be the only EB5 market through end-September or perhaps even beyond end-September. This is truly Pooled-Direct’s moment in the sun.

There is a player in the reauthorization saga that no one is paying attention to: USCIS. If it takes Congress well past October to act, USCIS may decide that it lacks authority to hold on to tens of thousands of RC-based 526s/924s that it is sitting on. USCIS may start returning or denying tens of thousands of petitions. 

How long USCIS believes it can hold files in abeyance is an issue that USCIS owes stakeholders an answer on. USCIS also owes Congress clear communication on this matter, so that Congress can take this into consideration in determining when to act on reauthorization. We urge USCIS to make a statement about what it sees as the duration of its authority on holding the tens of thousands of Regional Center I-526s/I-924s in abeyance.

Please let us know your thoughts by writing to us at editor@ilw.com

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