President Donald Trump has signed a new executive order aimed at tightening oversight of the U.S. financial system by increasing scrutiny of non-citizens and individuals who use alternative forms of identification when accessing banking services. The order, titled “Restoring Integrity to America’s Financial System,” is part of the administration’s broader immigration enforcement agenda and seeks to strengthen compliance with the 1970 Bank Secrecy Act.
Under the order, the Treasury Department and federal financial regulators are directed to provide updated guidance to banks and other financial institutions on identifying customers and transactions that may pose risks related to money laundering, terrorism financing, labor trafficking, and other illicit activities. A central focus of the policy is the use of foreign consular identification cards and Individual Taxpayer Identification Numbers (ITINs), which are often used by non-citizens, including undocumented immigrants, to access financial services and comply with tax laws.
The administration argues that gaps in customer identification procedures have allowed criminal networks, including drug traffickers and money launderers, to exploit U.S. financial institutions. The White House stated that stronger customer verification standards are necessary to protect national security and reduce financial risks. Officials also contend that extending credit to high-risk borrowers can impose costs on American consumers through higher fees and interest rates.
The executive order identifies several “red flags” that banks should monitor. These include repeated cash withdrawals, the use of shell companies to hide ownership of accounts, off-the-books wage payment systems, and the use of ITINs instead of Social Security numbers for opening accounts or conducting certain financial transactions. The administration believes that closer examination of these indicators will help financial institutions detect suspicious activity more effectively.
Critics, however, argue that the measures could make it more difficult for immigrants—especially undocumented individuals—to obtain basic financial services such as bank accounts, loans, and mortgages. They warn that increased scrutiny may discourage participation in the formal banking system and create additional barriers for people who already face challenges accessing financial institutions.
The policy comes amid a broader crackdown on immigration by the Trump administration. Federal authorities have increased enforcement actions, tightened access to certain public benefits, heightened scrutiny of visa and citizenship applications, and expanded detention and deportation efforts. In a related move, the Treasury Department announced plans to classify certain refundable tax credits as federal public benefits, potentially limiting eligibility for some non-citizens who pay taxes in the United States.
The White House has also pointed to cases where banks have issued mortgages, credit cards, and loans to undocumented immigrants. Although such lending exists, studies indicate it remains relatively uncommon. According to research from the Urban Institute, lenders issued only about 5,000 to 6,000 mortgages to borrowers using ITINs. Major mortgage backers such as Fannie Mae and Freddie Mac generally do not insure mortgages for ITIN borrowers, and many banks remain cautious about extending credit to such applicants.
The executive order also instructs the Treasury Department to explore regulatory changes that would allow financial institutions to collect more customer information, including immigration status and employment authorization.
The move comes as Trump continues to criticize major banks for what he describes as discrimination against conservatives. He has filed a $5 billion lawsuit against JPMorgan Chase and its chief executive over the closure of his accounts after the January 6, 2021, Capitol riot. JPMorgan has denied political motivations, stating that account closures are based on legal and regulatory risks.
At the same time, the administration has pursued deregulation in other areas of finance and has embraced digital assets, with Trump promoting the United States as a future global center for cryptocurrency innovation. The new order therefore reflects a dual strategy: tighter oversight of traditional banking customers while encouraging growth in emerging financial sectors.
