Donald J. Trump
In an executive order signed Tuesday, the president, 79, directed banks to gather more information about their customers’ immigration status, part of a push to ramp up Trump’s nationwidedesigned to combat money laundering and illicit finance, while also targeting what the White House described as the financial risks posed by lending to undocumented immigrants.
Treasury Secretary Scott Bessent must issue guidance to financial institutions identifying “red flags and suspicious activity patterns” tied to payroll tax evasion, labor trafficking, concealed account ownership, off-the-books wage payments, and the use of individual taxpayer identification numbers to open accounts or obtain credit “without verified legal presence,” the order The order also directs regulators to propose changes to know-your-customer rules within 90 days to ensure that financial institutions have the “authority, where warranted,” to gather further information from their customers, including “information relevant to whether account holders possess lawful immigration status and employment authorization,” the Wall Street JournalThe White House described the move as an effort to “restore integrity to America’s financial system,” arguing that undocumented immigrants posed heightened financial risks because deportation or job loss could affect their ability to repay mortgages, auto loans, credit cards, and other debts.
“Extending mortgages, credit cards, and auto loans to illegal aliens who face potential removal or loss of wages creates structural credit risks that threaten the safety and soundness of the national banking system,” the White House said in a fact sheet accompanying the order. The administration also pointed to Chinese money-laundering networks and Mexican drug cartels as justification for tightening the rules, claiming Chinese laundering networks have used U.S.-based accounts to move more than $312 billion tied to criminal organizations and human trafficking operations.
“Financial trend analyses have uncovered hubs of illicit fentanyl-related financial activity in the United States tied to Mexico-based cartels,” the White House said.by the White House that would have required banks to collect documents such as passports from both new and existing customers. According to the WSJ, banking industry groups pushed back heavily against the earlier proposal, citing concerns about its potential cost.
“We share the administration’s goal of ensuring a safe, sound, and secure financial system, and America’s banks work diligently every day to prevent bad actors from gaining access,” the group said in aon Tuesday. “We will continue to work with the administration, law enforcement and other stakeholders to ensure today’s actions bolster our financial defenses while maintaining consumer access to banking services. ”
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