On Tuesday, Trump signed an executive order, titled “Restoring Integrity to America’s Financial System,” that would require banks to treat a customer’s immigration status as a factor in evaluating potential financial risk.
The order describes “red flags and typologies” associated with suspicious activity. Among these are 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.
The move could make it more difficult for non-citizens, especially undocumented immigrants, to access financial services, even for legitimate reasons. The Administration has aggressively clamped down on both legal and illegal immigration in the U.S. It has detained and deported people en masse, including some with lawful immigration status; increased scrutiny for visa and citizenship applications; and restricted immigrants’ access to public services. Large-scale immigration raids have ignited protests across the country, which have ended in the killings of several Americans by federal agents.
“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,” a White House fact sheet for the order said. “Restoring sound underwriting standards puts money back in the pockets of law-abiding Americans.”
The White House 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 forms of higher fees and interest rates.”
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.
Tuesday’s order represents a pullback by the Trump Administration after months of targeting major U.S. financial institutions over “political debanking” and customer screening practices. Trump has repeatedly accused banks of discriminating against conservatives, and has filed a $5 billion lawsuit against JPMorgan Chase and its CEO over the closure of his accounts following the Jan. 6, 2021, Capitol attack. JPMorgan Chase said in January, “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.”At the same time, the White House has overseen a broader deregulatory push that has benefited firms outside the traditional banking framework, and openly embraced cryptocurrency, with Trump pledging to make the U.S. the “crypto capital of the planet.”
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