Trump Signs Order Aimed At Preventing Illicit Financial Activity

President Donald Trump is tightening safeguards across the American financial system as part of his administration’s broader effort to enforce immigration laws, protect national security, and prevent law-abiding citizens from subsidizing high-risk borrowers.

Trump signed an executive order titled “Restoring Integrity to America’s Financial System,” directing financial institutions to consider immigration-related information when evaluating possible risks associated with customers and their transactions.

Operating under the 1970 Bank Secrecy Act, the order instructs the Treasury secretary and federal financial regulators to issue guidance helping banks identify activity potentially connected to money laundering, terrorist financing, labor trafficking, and other criminal conduct.

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

The order identifies various “red flags and typologies” that may indicate suspicious financial activity.

Those warning signs include repeated cash withdrawals, shell companies used to conceal the true ownership of accounts, and certain payment platforms used to distribute “off-the-books” wages.

The list also includes situations in which a customer uses an individual taxpayer identification number, or ITIN, instead of a Social Security number to open an account or conduct certain banking transactions.

The federal government issues ITINs for tax-filing purposes without regard to immigration status. Critics contend that additional scrutiny could make it more difficult for non-citizens, particularly illegal immigrants, to access banking services even when their transactions are lawful.

The order is consistent with the administration’s comprehensive immigration-enforcement agenda, which has expanded scrutiny of visa and citizenship applications, restricted access to certain taxpayer-funded services, and increased detention and deportation operations.

Those enforcement actions have sparked demonstrations nationwide. Opponents have also pointed to Americans killed during encounters involving federal agents as evidence of what they characterize as the excessive use of force.

The Treasury Department previously announced plans to classify certain refundable tax credits as “federal public benefits.” Such a change could restrict eligibility for some non-citizens who file and pay taxes in the United States.

The White House framed the executive order as both a national-security measure and a defense of American consumers.

“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 administration argued that weaknesses in customer-verification procedures have created opportunities for dangerous criminal organizations.

The fact sheet claimed 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,” citing documented money-laundering networks linked to China.

White House officials also highlighted banks providing mortgages, credit cards, and other loans to illegal immigrants, along with employers allegedly underreporting wages paid to unauthorized workers.

The administration maintains that the resulting “costs are passed on to American consumers in the form of higher fees and interest rates.”

Economists generally point to a broader combination of factors when explaining interest rates, including benchmark rates used to balance inflation and employment, financial institutions’ funding costs, and individual measures such as borrowers’ credit scores.

A study from the left-leaning Urban Institute estimated that lenders issued approximately 5,000 to 6,000 mortgages to borrowers using ITINs.

Financial institutions are generally cautious about lending to ITIN holders. Fannie Mae and Freddie Mac also typically do not insure mortgages issued to borrowers who rely on an ITIN rather than a Social Security number.

Trump’s executive order further directs the Treasury Department to examine possible regulatory changes under the Bank Secrecy Act. Those revisions could make it easier for financial institutions to collect information about customers’ immigration status and authorization to work in the United States.

The president’s directive comes as he continues criticizing major banks for alleged discrimination against conservatives. Trump has filed a $5 billion lawsuit against JPMorgan Chase and its CEO over the closure of his accounts following the Jan. 6, 2021, Capitol riot.

JPMorgan Chase denied acting on political or religious grounds.

“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 company said in January.

At the same time, the Trump administration has pursued deregulation benefiting financial businesses outside the conventional banking system and enthusiastically embraced digital assets.

Trump has pledged to make the United States the “crypto capital of the planet,” positioning cryptocurrency as an important part of America’s economic and technological future.

The new executive order reflects a wider America First principle: Access to the nation’s financial system cannot come at the expense of national security, lawful commerce, or the American citizens who ultimately bear the consequences when enforcement fails.