President Donald Trump on Tuesday signed an executive order titled “Restoring Integrity to America’s Financial System,” directing federal agencies and financial regulators to tighten scrutiny of banks’ customer due diligence practices and consider immigration-related factors as part of financial risk assessments.
The order instructs the Treasury Department and federal banking regulators to issue guidance identifying suspicious activity tied to money laundering, terrorism financing, labor trafficking, and payroll tax evasion. It also calls for enhanced monitoring of patterns such as structured cash transactions, shell companies, nominee accounts, and the use of third-party payment systems to disguise wage payments. The document states that financial institutions should not “permit risks to our financial system posed by the extension of credit or financial services to the inadmissible and removable alien population.”
Regulators are also instructed to review potential updates under the Bank Secrecy Act aimed at reinforcing customer identification standards and enhancing risk-based due diligence procedures. The order also suggests that lenders may take potential deportation and resulting loss of income into account when evaluating a borrower’s ability to repay credit.
The administration framed the move as part of broader efforts to prevent fraud and strengthen financial safeguards, while stopping short of earlier proposals that would have required banks to collect citizenship information from all customers. Instead, the order focuses on regulatory guidance and risk indicators rather than mandatory data collection.
Banking industry representatives expressed concerns over the cost and complexity of expanding customer data requirements, while immigration advocates cautioned that stricter compliance rules could discourage some individuals from using formal banking services.
The administration also pointed to risks associated with Individual Taxpayer Identification Numbers, commonly used by individuals without Social Security numbers, and cited studies estimating that several thousand mortgages have been issued to ITIN holders.
