Funding-Challenged USCIS Set to Implement Proposed Fee Schedule, EB-5 Bears the Brunt

Funding-Challenged USCIS Set to Implement Proposed Fee Schedule, EB-5 Bears the Brunt

By Mona Shah, Esq. and Rebecca S. Singh, Esq.

Slightly more than one year after U.S. Citizenship and Immigration Services (“USCIS”) proposed a new fee schedule that was blasted by the EB-5 sectorone commenter (out of nearly 8,000) even called the proposal “ill-conceived,” and predicted that the posited fees “will have a chilling effect”—the funding-challenged agency is expected to implement the regimen in early Spring of 2024—a decision that industry insiders have indicated could be announced imminently.

The final rule was sent to the White House’s Office of Information and Regulatory Affairs (OIRA) on Monday, January 8, 2024. Although OIRA typically has up to 90 days to complete its review, it is expected that the Administration may prioritize finalizing this rule in order to give USCIS increased working capital.  Once it is published in the Federal Register, it will likely take effect at least 60 days later.

The proposed schedule, which was roundly criticized by practitioners for its astronomical increases  (e.g., fees for forms I-956 and I-956F will rise 168% from $17,795 to $47,695), reportedly may elicit a flurry of lawsuits from the EB-56 set as it grapples with these new amounts. Insiders have pointed to the probability of litigation challenging USCIS’s seeming inattention to the thousands of comments warning about the potential repercussions of these hikes.

With that in mind, some practitioners have wondered how the agency could demand so much of the industry without taking into consideration all of their quibbles. Will EB-5 investors, the group hit the hardest by these proposed fee increases, be able to afford them? Many such investors have spouses and children who also will incur such costs. Then there is the question of how this will impact regional centers. Will a regional center wishing to recertify or make a simple amendment to structure or geography be compelled to pay the new I-956 fee at multiple stages?

The following table features the major fee changes that will impact EB-5.

Note that the forms affected (including the I-526, the I-829, and the I-956) are ones that are delivered to USCIS at different stages of the EB-5 process. Because USCIS has issued minimal communications clarifying concerns about these proposed fee increases, many questions remain. Among them are inquiries pertaining to when, specifically, the new schedule will take effect, whether the fees will be retroactive, and how USCIS arrived at these numbers.

The agency last raised its fees in 2016, which the agency has alluded to, in its messaging about the need for increases. Although the concept of raising fees after a hiatus of about eight years to accommodate inflation and other economic factors is regarded by much of the EB-5 contingent as reasonable, the unknowns surrounding the hikes are troubling.

Other concerns have come to the foreground as well. Because USCIS is, as it notes on its website, “largely” funded by application and petition fees (unusual for a federal agency, which usually is fully funded by the U.S. government), it relies on the mandated largesse of its constituents to operate. That does not always sit well with practitioners—many of whom have lambasted USCIS for complicating the EB-5 process with complications such as delays, petty requests for evidence (“RFEs”) and notices of intent to deny (“NOIDs”), and incompetent adjudication … with the suggestion being that USCIS should clean up its own act by mitigating these inefficiencies before upping the fees that some claim it is misusing.

Clearly, some cautious pessimism is in order here—especially given the fact that the agency does not appear to have factored in all of the comments on these proposed fee increases. This kind of inattention to USCIS’s audience and its ongoing concerns is worrying. As such, on the brink of a momentous financial decision by USCIS, the industry remains on edge.

That edge, given USCIS’s determination to raise its fees, is not likely to be dulled soon.

Simon Butler contributed to this article.

POSTSCRIPT: On January 30, 2024, USCIS published a final rule pertaining to the adjustment of certain immigration and naturalization benefit request fees … the first time since 2016 that the agency has done so. Effective April 1, the rule covers a variety of EB-5 and other immigration forms that will see significant fee increases as part of USCIS’s adjustment effort.