Since signing the order Tuesday, President Donald Trump has sought to expand the administration’s push to clamp down on people living in the country illegally by bringing the country’s banking system into the enforcement effort. The order requires bank regulators and government departments to examine whether people without legal status are opening accounts or obtaining loans or credit cards, according to the White House’s framing of the measure.
The White House said the rationale for the policy is credit and financial-system risk. In the order, it said it would not “permit risks to our financial system posed by the extension of credit or financial services to the inadmissible and removable alien population.”
While the order directs regulators and agencies to look for signs of status, it stopped short of the most aggressive version described in earlier reporting. The AP reported that banks had expected an order that would make collecting customers’ citizenship information mandatory, but the new measure instead offers guidance rather than a clear mandate.
The AP said banks have never collected reliable public information about customers’ citizenship or immigration status, making it difficult to quantify the risk the administration is citing. Without such data, there are no widely known public figures for how much risk the administration’s targeted group poses to the financial system.
The administration’s approach builds on earlier signals from the Treasury Department. Treasury Secretary Scott Bessent, the AP reported, said last month that “there should be stricter rules” to open bank accounts and asked, “Why can the unknown foreign nationals come and open a bank account?” He added that banks should have answers to who is a citizen or green card holder and who is not.
Banking industry officials had been lobbying against a plan that would have compelled banks to collect citizenship status, the AP reported. The industry’s argument to the White House centered on cost and paperwork, and the AP said the guidance-based approach suggested banks may have persuaded the administration to scale back the requirements.
Immigration advocates have warned that requiring banks to collect citizenship information would push undocumented immigrants out of the financial system, increasing the number of people who are “unbanked,” the AP reported. The administration has also pursued other steps aimed at discouraging certain immigrant taxpayers from using parts of the financial system, including a Treasury announcement last November that would reclassify certain refundable tax credits as “federal public benefits,” which bars some immigrant taxpayers from receiving them even if they file and pay taxes.
The AP reported that tax experts expected the planned change to affect immigrants brought to the U.S. illegally by their parents as children, including those with Deferred Action for Childhood Arrivals, or DACA, status, as well as some immigrants with Temporary Protected Status.