President Trump signed an executive order Tuesday directing American banks to collect immigration status information from customers, marking a major expansion of his nationwide enforcement efforts into the financial sector.

New Banking Requirements Target Undocumented Immigrants

The executive order instructs Treasury Secretary Scott Bessent to issue guidance identifying suspicious activity patterns tied to payroll tax evasion, labor trafficking, and concealed account ownership. Banks must flag customers using individual taxpayer identification numbers to open accounts or obtain credit without verified legal presence. Federal regulators have 90 days to propose changes to existing know-your-customer rules, potentially requiring financial institutions to collect information about account holders’ lawful immigration status and employment authorization.

Currently, banks face no requirement to collect citizenship or immigration status data from customers. Federal law permits noncitizens to open bank accounts without restriction. The new directive could fundamentally alter how financial institutions verify customer identities and assess lending risks across the country.

White House Cites Financial System Risks

The administration justified the order by arguing undocumented immigrants create structural credit risks that threaten banking system stability. The White House contends extending mortgages, credit cards, and auto loans to individuals facing potential deportation or wage loss endangers financial institutions. Officials also cited Chinese money-laundering networks allegedly moving over $312 billion through American accounts tied to criminal organizations and human trafficking operations. The administration pointed to Mexican drug cartels and fentanyl-related financial activity as additional justification for tightening banking regulations.

Industry Pushback Softens Initial Proposal

The final executive order represents a scaled-back version of earlier White House proposals. Initial plans would have required banks to collect passport documents from both new and existing customers. Banking industry groups mounted significant opposition, citing implementation costs and operational challenges. The American Bankers Association responded Tuesday that member institutions share the administration’s goal of maintaining a secure financial system while working to prevent bad actors from accessing banking services. The group pledged continued cooperation with law enforcement and regulators to strengthen financial defenses without restricting consumer access to banking.

Constitutional And Privacy Concerns Emerge

The order raises questions about financial privacy rights and equal access to banking services for legal residents. Critics may challenge whether immigration enforcement authority extends to private financial transactions. The directive could affect millions of customers who use individual taxpayer identification numbers, including legal residents awaiting permanent documentation. Implementation details remain unclear as regulators begin the 90-day review process to draft specific rule changes.