Trump Signs Order Aimed At Preventing Illicit Financial Activity

President Donald Trump is moving to prevent illegal immigration, financial fraud, and unlawful employment schemes from exploiting the American banking system.

Executive Order 14406, titled “Restoring Integrity to America’s Financial System,” directs federal regulators to strengthen customer-identification procedures, identify suspicious financial activity connected to unauthorized employment, and ensure that lenders properly consider whether borrowers possess a reliable legal source of income.

President Trump signed the order on May 19, 2026. Rather than imposing a blanket prohibition on financial services for all non-citizens, the measure focuses on people without legal work authorization, removable aliens, employers operating outside federal law, and transactions presenting identifiable fraud or national-security risks.

Under the order, the Treasury Department must issue a formal advisory identifying suspicious financial patterns associated with the exploitation of the American financial system by unauthorized workers, labor brokers, criminal organizations, and employers evading federal law.

The administration said the changes should “take into account the potential threats to the integrity of the United States financial system posed by foreign consular identification cards.”

The order calls for regulators to identify “red flags and typologies” connected to illicit financial activity.

Those warning signs include repetitive cash deposits or withdrawals designed to evade federal reporting thresholds, payroll-tax evasion, shell companies or nominee accounts used to conceal true ownership, labor trafficking, and third-party payment platforms used to facilitate “off-the-books” wage payments.

The directive also identifies the use of an individual taxpayer identification number, or ITIN, as a potential risk factor when it is used to open an account or obtain credit without verified lawful immigration status.

An ITIN allows individuals who are not eligible for Social Security numbers to comply with federal tax laws. The Trump order does not declare every use of an ITIN suspicious. It states that enhanced scrutiny may be warranted when an ITIN is used instead of a Social Security number or work-authorized visa under circumstances indicating unlawful employment, identity misrepresentation, or other illicit conduct.

The distinction is significant. The administration is not treating tax compliance itself as a crime. It is directing financial institutions to determine whether identity documents and banking products are being used to conceal unauthorized employment, evade payroll taxes, launder money, or finance criminal operations.

President Trump’s order further instructs the Treasury Department, working with federal financial regulators, to propose stronger Bank Secrecy Act requirements for verifying account holders and beneficial owners.

Institutions could also be authorized to obtain additional information concerning immigration status and employment authorization when other risk indicators make that information relevant to fraud, sanctions evasion, identity misrepresentation, or unlawful financial activity.

The order separately addresses lending risks. Regulators were instructed to clarify that the potential deportation of a borrower and the resulting loss of employment income may be considered when determining whether that borrower can repay a mortgage, credit card balance, automobile loan, or another extension of credit.

The Consumer Financial Protection Bureau subsequently stated that federal lending law may require creditors to consider immigration-related information when an application or supporting records show that a borrower’s future income could be interrupted. It also noted that immigration status may legally be considered when it affects a creditor’s ability to obtain repayment.

“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 order added.

The White House argued that “gaps in customer identification practices have allowed terrorists, drug traffickers, money launderers, and other criminal networks to exploit U.S. financial institutions to move illicit funds and evade law enforcement.”

The administration specifically cited financial activity associated with Mexican drug cartels and Chinese-linked money-laundering networks. According to the executive order, foreign passport holders have used American accounts to help launder more than $312 billion for criminal organizations, including networks associated with human trafficking.

Administration officials also pointed to employers who underreport wages, use mismatched identification numbers, avoid payroll taxes, and compensate unauthorized workers through informal payment systems.

Such practices do not merely violate immigration or employment laws. They can conceal income sources, distort underwriting information, disadvantage law-abiding businesses, and transfer financial risks to banks and their customers.

The White House said that when banks absorb elevated lending risks, the resulting “costs are passed on to American consumers in the form of higher fees and interest rates.”

Interest rates are influenced by numerous factors, including Federal Reserve policy, inflation, bank-funding expenses, market conditions, and an individual borrower’s credit history. The administration’s argument is narrower: lenders should not be pressured to ignore an identifiable risk to a borrower’s continued income simply because that risk arises from unlawful immigration or employment status.

Research from the Urban Institute estimated that approximately 5,000 to 6,000 ITIN mortgages were issued during 2023, making them only a small portion of the overall mortgage market. Such loans generally remain outside the conventional mortgage system because Fannie Mae and Freddie Mac typically require borrowers to have Social Security numbers and lawful residency documentation.

Critics contend that heightened scrutiny could push some illegal immigrants away from regulated banks and into a cash-based underground economy. Supporters counter that the possibility of customers avoiding oversight is not a legitimate reason for financial institutions to overlook identity fraud, unlawful employment, tax evasion, or an applicant’s ability to repay a loan.

The financial order complements the administration’s broader effort to ensure that federal benefits and taxpayer-supported programs are reserved for those legally eligible to receive them.

The Treasury Department previously announced plans to classify certain refundable tax credits as “federal public benefits,” potentially limiting eligibility for categories of non-citizens who file federal tax returns but do not satisfy statutory immigration requirements.

President Trump has simultaneously targeted another threat to equal access in the banking system: political debanking.

In January, Trump filed a $5 billion lawsuit against JPMorgan Chase and CEO Jamie Dimon, alleging that the company closed accounts belonging to him and his businesses for political reasons following the events of Jan. 6, 2021. JPMorgan has denied the allegation.

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.”

The administration’s position draws a clear line between legitimate risk management and ideological discrimination. Banks should be permitted to protect themselves from fraud, money laundering, sanctions evasion, unauthorized employment, and unreliable income. They should not be allowed to deny lawful customers access to financial services merely because of their politics, religion, or constitutionally protected speech.

At the same time, Trump has supported deregulation and competition for legitimate financial-technology businesses, including the digital-asset industry. He has pledged to make the United States the “crypto capital of the planet.”

That combination reflects the administration’s larger America First financial agenda: reduce political discrimination and unnecessary bureaucracy while enforcing immigration law, protecting taxpayers, and preventing criminal networks from abusing the country’s financial infrastructure.