President Donald Trump signed a new executive order on Tuesday aimed at tightening financial regulations surrounding undocumented immigrants, their employers, and international money transfers. The directive, titled “Restoring Integrity to America’s Financial System,” orders federal agencies to crack down on banking services and loans provided to individuals living in the country without work authorization.
The administration stated that the order is designed to combat national security threats and financial fraud, specifically pointing to cross-border money laundering, drug cartel operations, and human trafficking networks.
However, the order also focuses heavily on domestic banking habits and consumer credit, arguing that lending money to “the inadmissible and removable alien population” introduces structural risks to the U.S. financial system because those borrowers could face deportation and sudden wage loss.
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Under the new order, the Treasury Department has 60 days to issue a formal advisory to banks detailing “red flags” and suspicious activities. These include employers evading payroll taxes for unauthorized workers, the use of foreign consular ID cards, and the use of Individual Taxpayer Identification Numbers (ITINs) to open bank accounts or secure credit products without verified lawful immigration status. Within 90 days, the Treasury must propose changes to the Bank Secrecy Act to strengthen customer due diligence, allowing financial institutions to verify whether account holders have lawful immigration status and employment authorization.
The order also directs the Consumer Financial Protection Bureau (CFPB) to clarify within 60 days that potential deportation is a valid risk factor for lenders to consider when evaluating a borrower’s ability to repay a loan. This means banks could legally factor immigration status into underwriting decisions for everyday consumer credit products, including mortgages, auto loans, and credit cards.
“My Administration will not tolerate national security and public safety risks caused by illicit cross-border financial activity, nor will it permit risks to our financial system posed by the extension of credit or financial services to the inadmissible and removable alien population,” Trump wrote in the text of the order.
Federal financial regulators, including the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), have been given a 60-day window to issue formal guidance to banks on how to manage the credit risks associated with non-work-authorized populations.
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