President Donald Trump signed an executive order on Tuesday requiring U.S. financial institutions to assess customers’ immigration status when evaluating financial risks.
The order, titled “Restoring Integrity to America’s Financial System,” directs the Treasury Secretary and federal regulators to provide banks with guidance on identifying potentially risky customer profiles and transactions. The measure operates within the framework of the 1970 Bank Secrecy Act and targets activity associated with money laundering, terrorism financing, and labor trafficking.
What the Order Requires
Financial institutions must now flag suspicious activity patterns, including repetitive cash withdrawals, use of shell companies, and wage payments through non-traditional platforms. The order specifically identifies use of an Individual Taxpayer Identification Number (ITIN)-a number accessible to non-citizens regardless of immigration status-as a potential red flag when opening accounts or conducting banking transactions.
The White House stated in a fact sheet that the measure aims to “restore integrity to America’s financial system, cracking down on illicit activity that threatens national security.” Officials argue the order prevents criminals and terrorists from exploiting U.S. financial institutions to move illegal funds.
Potential Impact on Non-Citizens
The order could significantly restrict non-citizens’ access to banking services, particularly undocumented immigrants. A study by the Urban Institute found that lenders issued between 5,000 and 6,000 mortgages to ITIN customers, though major mortgage insurers like Fannie Mae and Freddie Mac already limit lending to such borrowers.
The Treasury Department also disclosed plans to reclassify certain refundable tax credits as “federal public benefits,” which would further limit eligibility for some non-citizens filing U.S. taxes. This regulatory shift could affect millions of immigrants who participate in the tax system legally.
Administration’s Rationale
The White House cited documented cases of Chinese-linked money laundering networks and instances of banks extending credit to undocumented immigrants as justification. Officials contend that associated costs are passed to American consumers through higher fees and interest rates.
However, economists generally attribute rising interest rates to benchmark rates set by the Federal Reserve to manage inflation and employment, bank funding costs, and individual credit factors rather than lending practices toward non-citizens.
Broader Context
The order represents part of the Trump administration’s wider immigration enforcement agenda. Trump has previously accused major banks of discrimination, filing a $5 billion lawsuit against JPMorgan Chase over account closures following the January 6, 2021 Capitol riot.
JPMorgan Chase responded in January, stating: “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.”
Simultaneously, the White House has pursued a deregulatory agenda benefiting non-traditional financial firms and cryptocurrency companies. Trump has pledged to make the United States the “crypto capital of the planet.”
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