Why did I-526 denials increase in 2016?

I-526 petitions filed also went up drastically in 2015. I am not familiar with the study you are referring to, but if denials have gone up proportionally, it may be due to better trained officers finding bad applications.

My experience has been that if the application is in compliance with the laws and policies, USCIS has no option but to approve. My guess is that the newly filed cases are not in compliance.

There can be many reasons, but I think it was because of the rumors that Congress would increase the financial requirements after 09/30/15 that caused a large surge in applications. Perhaps many of them were hastily constructed and therefore were denied.

There are several factors in play. First, USCIS began reviewing the I-526 to make sure that they should only approve those projects and petitions that have the chance for I-829 approvals two years later. Second, USCIS instituted an indebtedness policy that disallowed unsecured loan to be used to show source of funds and other restrictions. These two factors are probably the biggest reasons for the increased number of denials.

Although USCIS releases statistics on denials, it does not break down the reasons for denials (i.e., source of funds not clear, not a new enterprise). My best guess is that the popularity of the EB-5 program has led many applicants and attorneys to file petitions without fully understanding the requirements and thus, not documenting or meeting the requirements.

It is hard to be specific as to why the I-526 denials increased, but I would speculate there were far more cases filed in a big hurry in order to meet the perceived deadline before the expiration of the EB-5 regional center program last September, and then as it was extended into December hoping that the individual investor would be grandfathered under the possibility of new legislation; thus the rush to file many cases, some of which obviously had problems.

With the dramatic increase in popularity with the EB-5 program comes increased competitiveness to find investors. Therefore many regional centers and agents might not screen investors as carefully to ferret out those that might not be ready to participate. It is critical to make sure that all of the documents needed to accompany an I-526 petition are in order. I believe this is the dominant reason for the increased rate of denials in recent quarters. I have observed that the rate of denials is not evenly spread among all regional centers, which means that if regional centers and agents are carefully screening they can continue to keep the rate of denials low.

It appears to be a combination of source of funds and project issues. If you study the historical denial rates, these are normal. Merely very high approval in the last 1-2 years.

A generalized assumption based on percentages will not paint an accurate picture of the state of things. Just as well, the reasons advanced by USCIS should be viewed on a case-by-case basis. Among the common reasons are: 1) the fact that some petitioners had filed either incomplete petitions; 2) or unsatisfactory documentation of petitions, which may include things such as inadequate documentation of source(s) of funds or even inability to show the investment fund(s) is/are from legal source(s), 3) although it is very rare, some filing regional centers had actually gone out of business, for one reason or the other while some petitions were pending, 4) there were cases where fraudulent practices and failure to comply with laws had resulted in denial, and 5) last but not the least is that some petitioners just did not provide a satisfactory response to either a Request for Further Evidence or Notice of Intent to Deny. These are just some of the reasons.

An increase in denials could be for any reason, including applications lacking in proper support. It is important that you retain the best of immigration attorneys when moving forward with an EB-5 case.