The ruling of the U.S. Court of Appeals for the D.C. Circuit on October 27, 2020, is probably the most interesting one that has happened since the inception of the EB-5 program. On behalf of H. Zhang and M. Hagiwara, their attorney Ira Kurzban argued that USCIS should admit unsecured loans as permissible to fund the EB-5 capital. Until this ruling, we have always recommended our clients that, while they could borrow money from different sources by pledging their assets such as real estate or marketable securities, unsecured loans were not permissible.
Kurzban successfully argued that USCIS advances several conflicting policy arguments. He said, ìAccording to the agency, if the proceeds of unsecured loans qualified as capital, then wealthy third parties could buy visas for foreigners unlikely to create jobs, and foreign investors could qualify for visas by investing domestic funds. The plaintiffs respond that the statute sets forth requirements for the enterprise (not the investor) to create jobs and does not prohibit investments (secured or otherwise) involving the U.S. funds of foreign investors. We need not engage these arguments, for we cannot disregard the plain meaning of a regulation based on policy considerations, Mercy Hosp., Inc. v. Azar, 891 F.3d 1062, 1070 (D.C. Cir. 2018). Likewise, given the clarity of the governing regulation, we cannot defer to the agencyís contrary interpretation, Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019). Text, structure, and regulatory context show that the term cash, as used in 8 C.F.R. ß 204.6(e), unambiguously includes the proceeds of third-party loans. Because USCISís contrary construction is impermissible, we affirm the district courtís decision to set aside the denial of the plaintiffsí petitions.” As a result, on April 14, 2021, USCIS approved Mr. Zhangís I-526 petition.