Trump Signs Order Aimed At Preventing Illicit Financial Activity
President Donald Trump is moving to tighten access to America’s financial system for non-citizens as part of his administration’s broader effort to restore immigration enforcement, protect national security, and crack down on financial abuses tied to illegal labor and illicit money flows.
On Tuesday, Trump signed an executive order titled “Restoring Integrity to America’s Financial System,” directing financial institutions to weigh a customer’s immigration status when assessing potential financial risk.
The order, issued under the framework of the 1970 Bank Secrecy Act, requires the Treasury Secretary and federal financial regulators to provide banks with new guidance for identifying customers whose financial profiles or transactions could raise concerns about money laundering, terrorism financing, labor trafficking, and other forms of illicit activity.
According to the order, the changes 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 also calls for regulators to outline “red flags and typologies” tied to suspicious financial behavior.
Those red flags include repeated cash withdrawals, the use of shell companies to hide true account ownership, and the use of certain platforms for “off-the-books” wage payments.
The order also identifies the use of an individual taxpayer identification number, or ITIN, in place of a Social Security number when opening an account or conducting certain banking transactions. ITINs are available regardless of immigration status and are commonly used to file and pay taxes.
Critics argue the move could make it harder for non-citizens, especially illegal immigrants, to obtain financial services, even in cases where they may be using the system for lawful purposes.
But the Trump administration is framing the policy as a long-overdue step to protect American citizens, strengthen financial transparency, and prevent foreign nationals or criminal networks from exploiting gaps in the banking system.
The order comes as President Trump has pursued a tougher immigration agenda during his second term, including stricter limits on access to public services, increased scrutiny of visa and citizenship applications, and expanded detention and deportation operations.
Large-scale immigration enforcement actions have sparked protests across the country, with critics accusing the administration of using overly aggressive tactics.
In November, the Treasury Department also announced plans to reclassify certain refundable tax credits as “federal public benefits,” a move that would restrict eligibility for some non-citizens who file taxes in the United States.
“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 said weaknesses in customer identification standards have allowed criminal networks to abuse American financial institutions.
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 Chinese-linked money laundering networks.
The administration also pointed to cases involving banks that extended mortgages, credit cards, and loans to undocumented immigrants, as well as employers accused of underreporting wages for undocumented workers. The White House argued that related “costs are passed on to American consumers in the form of higher fees and interest rates.”
Economists generally note that interest rates are influenced by benchmark rates, inflation pressures, job growth, bank funding costs, and borrower-specific factors such as credit scores.
A study by the left-leaning Urban Institute found that lenders issued roughly 5,000 to 6,000 mortgages to customers using ITINs.
Banks have generally been hesitant to lend to ITIN borrowers, and Fannie Mae and Freddie Mac are typically reluctant to insure mortgages for borrowers using an ITIN instead of a Social Security number.
Trump’s order also directs the Treasury Department to consider changes under the Bank Secrecy Act that would make it easier for financial institutions to collect customer data, including immigration status and employment authorization.
The move comes as Trump has also accused major banks of discriminating against conservatives. He 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 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 Trump White House has pursued a broader deregulatory agenda benefiting financial firms outside the traditional banking system and has openly embraced cryptocurrency. Trump has pledged to make the United States the “crypto capital of the planet.”
For conservatives, the executive order reflects a larger governing philosophy: American financial institutions should serve law-abiding citizens, not become a backdoor support system for illegal immigration, labor exploitation, or foreign-linked criminal activity.
The policy is likely to draw fierce opposition from Democrats, immigration activists, and financial industry critics. But the administration is betting that voters will support stricter standards when the issue is framed around national security, financial integrity, and fairness for American citizens.