[Q] Why did USCIS deny a majority of I-526 petitions for RC-based EB-5 cases from 1995 to 1999?
People might disagree on the answer, but in our opinion, USCIS denied a majority of I-526 petitions during this "black" period for EB-5 Program primarily for two reasons. First, they did not believe jobs were being created in the applicable region. Second, promissory notes were being used so that eb-5 investors were not investing that much money to begin with, i.e., often deposited around $125,000 of the requisite $500,000 USD and carried the remainder on a promissory note. Third, limited partnerships contained provisions stating that it would guarantee payments, etc.
Like any new program, there were some new programs that just "bent" the rules too much, and honestly, USCIS had also issued inconsistent or conflicting guidelines. This is why USCIS does not want to make the same mistake again and is now being very sensitive about making sure any guidance memos they issue are at least consistent and comply with their interpretation of the EB-5 statutes.