President Donald Trump signed an executive order on Tuesday requiring financial institutions to assess customers’ immigration status as part of potential financial risk evaluation, affecting non-citizens’ access to U.S. banking services.
The order, titled “Restoring Integrity to America’s Financial System,” directs the Treasury Secretary and federal financial regulators to provide banks with guidance on identifying customers whose profiles or transactions may indicate risks such as money laundering, terrorism financing, and labor trafficking. The directive operates within the framework of the 1970 Bank Secrecy Act.
The executive order states that its purpose is to “take into account the potential threats to the integrity of the United States financial system posed by foreign consular identification cards.” The guidance describes “red flags and typologies” associated with suspicious activity, including repetitive cash withdrawals, the use of shell companies to conceal true account ownership, and the use of certain platforms for “off-the-books” wage payments.
Among the identified flags is the use of an individual taxpayer identification number (ITIN) in place of a Social Security number when opening an account or performing specific banking transactions. The ITIN is accessible to all individuals regardless of immigration status and is used to file and pay taxes. The order also directs the Treasury to consider regulatory changes under the Bank Secrecy Act that would enable financial institutions to more readily collect customer data, including immigration status and employment authorization.
Even for legitimate reasons, the move could exacerbate the challenges faced by non-citizens, particularly undocumented immigrants, in obtaining financial services. In November, the Treasury Department disclosed its intention to reclassify specific refundable tax credits as “federal public benefits,” which would limit the eligibility of certain non-citizens who submit taxes in the United States.
A White House fact sheet for the order stated, “President Trump is taking action to restore integrity to America’s financial system, cracking down on illicit activity that threatens national security and ending the extension of credit to high-risk borrowers that American citizens are forced to subsidize.” The fact sheet added that “Restoring sound underwriting standards puts money back in the pockets of law-abiding Americans.”
The White House claimed that “gaps in customer identification practices have allowed terrorists, drug traffickers, money launderers, and other criminal networks to exploit U.S. financial institutions to move illicit funds and evade law enforcement,” citing documented Chinese-linked money laundering networks. The administration also pointed to cases of banks extending mortgages, credit cards, and loans to undocumented immigrants and employers underreporting wages for undocumented employees, arguing that associated “costs are passed on to American consumers in the form of higher fees and interest rates.”
Economists generally attribute higher rates to benchmark rates, which are used to balance inflation and job growth, bank funding costs, and individual factors like borrowers’ credit scores. According to a study by the left-leaning Urban Institute, lenders issued around 5,000 to 6,000 mortgages to customers with ITINs, though banks are generally reluctant to lend to such customers, and Fannie Mae and Freddie Mac are typically disinclined to insure mortgages for borrowers with an ITIN.
The order reflects the administration’s broader immigration enforcement strategy, which has included restricting immigrant access to public services, increasing scrutiny for visa and citizenship applications, and conducting extensive immigration operations. The move also occurs alongside the White House’s wider deregulatory push that has benefited firms outside the traditional banking framework, and its open embrace of cryptocurrency, with Trump pledging to make the U.S. the “crypto capital of the planet.”
Trump has repeatedly accused banks of discriminating against conservatives and filed a $5 billion lawsuit against JPMorgan Chase and its CEO over the closure of his accounts following the January 6, 2021, Capitol riot. JPMorgan Chase responded in January, saying “Our company does not close accounts for political or religious reasons. We do close accounts because they create legal or regulatory risk for the company. We regret having to do so, but often rules and regulatory expectations lead us to do so.”
The executive order signals an intensified focus on linking immigration status to financial system access, establishing new compliance frameworks that will require financial institutions to navigate complex regulatory guidance while managing increased data collection obligations related to customer immigration and employment status.
