Trump Orders Banks to Increase Scrutiny of Customers’ Immigration Status

President Donald Trump has signed an executive order directing banks and financial regulators to increase scrutiny of customers’ citizenship status as part of his administration’s immigration enforcement efforts.

The order, announced on Tuesday, does not require banks to collect citizenship information from all customers, a proposal that had raised concerns across the financial industry. Instead, it instructs regulators and financial institutions to pay closer attention to potential financial crimes linked to undocumented workers, including payroll tax evasion, hidden account ownership and labour trafficking.

According to the Associated Press, the White House said undocumented borrowers could present financial risks to banks if deportations prevent them from repaying loans. “We will 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 said. 

However, there is limited public evidence on the scale of these risks, and US banks have not traditionally collected immigration or citizenship information during standard customer checks. The order also directs the Treasury Secretary to propose amendments to the Bank Secrecy Act to strengthen customer due diligence requirements. 

The proposed changes would allow authorities to request additional information when suspicious activity is identified, expanding the government’s oversight of financial institutions. Banks had strongly opposed a stricter version of the proposal that would have required mandatory collection of citizenship data. 

Financial institutions warned that such measures would increase administrative costs and create additional compliance burdens. Immigration advocates also warned that tougher requirements could lead undocumented immigrants to withdraw their savings from banks, increasing reliance on cash and exposing more people to financial exploitation.

Access to mortgages for undocumented immigrants in the United States is already limited. Research by the Urban Institute found that only a small number of home loans have been issued using Individual Taxpayer Identification Numbers (ITINs), which are often used by undocumented workers instead of Social Security numbers. 

Major mortgage providers such as Fannie Mae and Freddie Mac generally do not support ITIN-based loans, restricting access to home ownership for many immigrants. The executive order reflects the administration’s effort to tighten immigration enforcement while avoiding some of the measures opposed by the banking sector. 

Its long-term impact will depend on how regulators apply the guidance and whether financial institutions introduce stricter practices in response.