Since taking office, President Donald Trump has pushed a broader immigration enforcement agenda that reaches beyond immigration courts and into other areas of government oversight. On Tuesday, Trump signed an executive order that would require banks and regulators to take a closer look at whether some customers may lack legal status.
The order directs bank regulators and government departments to look for signs that people without legal status are opening accounts or obtaining loans or credit cards. In the White House’s framing, the measure is intended to address credit and financial-system risks that officials said could follow if a customer is deported.
In the executive order, the White House linked banking decisions to immigration status by arguing that federal authorities would not allow the financial system to take on risks from lending or other financial services to people officials consider “inadmissible and removable.” The order states 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.”
The administration also moved from signaling in advance to a written directive that, at least in the final form, stops short of making citizenship information an across-the-board requirement for banks. Earlier reporting had suggested the White House was drafting an order that would make collecting customers’ citizenship information mandatory, but the order Trump signed offers guidance to banks rather than a mandate.
Treasury Secretary Scott Bessent had previewed the approach before the signing. Last month, Bessent said 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: “So how do you know your customer if you don’t know if they have legal or illegal status, whether a U.S. citizen or green card holder?”
Banking industry officials had argued against a more direct requirement, lobbying for months to stop the White House from issuing an executive order that would have made collecting customers’ citizenship status mandatory. According to the AP account, banks raised concerns that such a mandate would be expensive and require extensive paperwork, and the final version of the order suggests they were able to influence the administration’s approach.
Advocates for immigrants said they expected that a requirement to collect citizenship or immigration information could drive undocumented immigrants out of the financial system, increasing the number of “unbanked” people. The executive order arrives alongside other measures the White House has taken to discourage undocumented workers from using financial services.
The White House and Treasury previously announced a change last November that reclassified certain refundable tax credits as “federal public benefits,” a designation that bars some immigrant taxpayers from receiving them even if they file and pay taxes and would otherwise qualify. Tax experts said that change would largely affect groups including people brought to the U.S. illegally as children who received Deferred Action for Childhood Arrivals status, known as DACA recipients, and people with Temporary Protected Status.
No reliable public data exists, the AP reported, on how much risk customers without legal status pose to the financial system because banks have never collected information about customers’ citizenship or immigration status. The order therefore arrives as a new compliance focus for financial institutions that historically have not been asked to track citizenship in their customer-risk assessments.