Trump Signs Executive Order Targeting Immigration Status in Financial Risk Assessments
WASHINGTON — President Donald Trump signed an executive order on Tuesday titled “Restoring Integrity to America’s Financial System,” directing financial institutions to consider customers’ immigration status when evaluating potential risks.
The order instructs the Treasury Secretary and federal regulators to issue guidance for banks under the 1970 Bank Secrecy Act. The guidance will highlight “red flags” associated with suspicious activity, including repetitive cash withdrawals, use of shell companies, off-the-books wage payments, and the use of Individual Taxpayer Identification Numbers (ITINs) in place of Social Security numbers. It specifically addresses potential threats linked to foreign consular identification cards.
Administration officials argue the changes aim to close gaps that have allowed terrorists, drug traffickers, money launderers, and criminal networks to exploit U.S. financial institutions. A White House fact sheet cited Chinese-linked money laundering operations and claimed that lending to undocumented immigrants and related underreporting of wages impose costs on American consumers through higher fees and interest rates. “Restoring sound underwriting standards puts money back in the pockets of law-abiding Americans,” the fact sheet stated.
The move builds on broader immigration enforcement efforts, including restrictions on access to public benefits. In November, the Treasury Department proposed reclassifying certain refundable tax credits as federal public benefits, potentially limiting eligibility for some non-citizens.
Critics note that ITINs are issued to individuals regardless of immigration status for tax filing purposes. A study by the Urban Institute found lenders issued roughly 5,000 to 6,000 mortgages to ITIN holders, though banks and government-backed entities like Fannie Mae and Freddie Mac have generally shown reluctance to extend such loans.
The order also directs the Treasury to explore regulatory changes that would make it easier for institutions to collect data on immigration status and employment authorization. Trump has previously accused some banks of political bias, including a $5 billion lawsuit against JPMorgan Chase related to account closures following the January 6, 2021, Capitol riot.
The administration has simultaneously pursued deregulation in parts of the financial sector and expressed strong support for cryptocurrency development.
This executive order is the latest in a series of measures under the Trump administration tightening scrutiny on immigration-related financial activity.
