Trump Orders Closer Scrutiny of Illicit Activity in U.S. Banking
President Donald Trump has directed federal officials to tighten scrutiny of financial activity tied to unauthorized employment, concealed account ownership and cross-border criminal networks.
His executive order, “Restoring Integrity to America’s Financial System,” instructs the Treasury Department to issue an advisory to banks identifying patterns associated with payroll tax evasion, labor trafficking and suspicious transfers. It also calls for proposed changes to customer due diligence rules under the Bank Secrecy Act.
The order points to shell companies used to hide who controls an account, payment platforms used for “off-the-books” wages and repeated cash transactions structured to avoid scrutiny. It also identifies the use of an individual taxpayer identification number, or ITIN, as a potential reason for closer review when an applicant lacks verified lawful immigration status. An ITIN allows a person to file taxes; its use alone does not establish wrongdoing.
Treasury and federal financial regulators are also directed to consider whether banks need greater authority to request information about a customer’s immigration status or work authorization when other indicators raise compliance concerns. Separately, the Consumer Financial Protection Bureau must consider guidance on whether a borrower’s potential loss of wages following deportation may be relevant to a lender’s assessment of ability to repay. These provisions call for agency action and review; they do not impose an immediate, blanket ban on accounts or loans for noncitizens.
“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.
The administration argues that weak identification practices have given criminal networks room to move money through U.S. institutions. Its fact sheet cites Chinese-linked money laundering networks and fentanyl-related financial activity tied to Mexican cartels. It also contends that poorly assessed lending risks can ultimately affect American customers through higher fees and interest rates. Those broader consumer-cost claims are the administration’s argument, rather than a finding established by the order itself.
The policy extends Trump’s focus on immigration enforcement into banking oversight. Its practical effect will depend on the guidance and regulations agencies issue, and on how financial institutions apply them to individual customers.