WASHINGTON — President Donald Trump signed an executive order on May 19, 2026, titled “Restoring Integrity to America’s Financial System,” directing the Treasury Department and federal financial regulators to rework the guidance banks use when deciding which customers and transactions deserve closer scrutiny. The order, numbered 14406, puts immigration status and work authorisation at the centre of that exercise, instructing regulators to consider how those factors relate to money laundering, terrorism financing, labour trafficking and other illicit financial activity.
The order does not, on its own, ban any group of people from holding a bank account or borrowing money. That distinction matters, because much of the early reaction treated it as an immediate prohibition. What it does is set in motion a series of regulatory steps: a Treasury advisory describing warning signs for banks to watch, proposed changes to the rules that implement the Bank Secrecy Act, and a review of how lenders judge whether a borrower can repay a loan. The practical effect for any individual customer will therefore depend on the guidance and rule changes that follow, not only on the words of the order itself.
Even so, the direction of travel is clear. The administration argues that the existing system for checking customers has left gaps that criminals and employers breaking immigration and tax law have been able to exploit. Critics, including consumer advocates, argue that the same approach risks pushing lawfully present immigrants, and people wrongly assumed to lack status, out of mainstream banking, and could expose lenders to discrimination claims if status is used crudely as a proxy for risk. Both claims are now being tested in the regulatory process the order created, and neither side’s worst-case prediction has yet been proved by a final rule.
The White House case for the order rests on two linked arguments. The first is about crime and national security. In its fact sheet, the administration claimed that weaknesses in customer identification had allowed terrorists, drug traffickers, money launderers and other criminal networks to move illicit funds through American banks and evade law enforcement. It pointed in particular to Chinese-linked money-laundering networks, which it said had become a major channel for moving the proceeds of drug trafficking and other crime. A House Republican policy summary of the order cited reporting that Chinese money launderers had moved large sums through American banks and other financial institutions in recent years to aid Mexican drug cartels and other criminal groups.
The second argument is about lending and the cost of credit. The administration claimed that mortgages, credit cards and other loans extended to people without legal immigration status, together with wages underreported by employers of such workers, create risks that are ultimately passed on to other consumers through higher fees and interest rates. The White House framed the order as restoring sound underwriting standards and ending what it described as a subsidy for high-risk borrowers. That framing is a claim, not an established measurement: the size of any such effect on fees or rates for other borrowers has not been quantified in the order itself, and independent analysis of the lending involved points to a relatively small market.
Understanding the order requires understanding the law it builds on. The Bank Secrecy Act, enacted in 1970, requires financial institutions to help the government detect money laundering and other suspicious activity, including by keeping records, filing reports on certain transactions and maintaining programmes to identify their customers. Over the decades, regulators have added customer due diligence rules that require banks to understand the nature and purpose of customer relationships and to conduct ongoing monitoring for suspicious transactions. The executive order directs Treasury Secretary Scott Bessent and the federal banking regulators — the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the National Credit Union Administration — to strengthen those requirements with immigration-related risk in mind.
The order set deadlines that explain why its effects arrived in stages rather than all at once. Within 60 days, Treasury was directed to issue a formal advisory to financial institutions about risks associated with the exploitation of the financial system by people without work authorisation and by their employers. Within 90 days, Treasury was to propose changes to the Bank Secrecy Act’s implementing regulations to strengthen risk-based customer due diligence. Within 180 days, Treasury and the regulators were to consider further changes to customer identification rules. The Consumer Financial Protection Bureau, the consumer finance watchdog, was separately directed to consider clarifying how a borrower’s possible removal from the United States, and the resulting loss of wages, should feature in a lender’s assessment of ability to repay.
Those follow-up steps began to appear in June 2026. On June 5, the Financial Crimes Enforcement Network, known as FinCEN, together with other federal agencies, issued a joint advisory highlighting fraud patterns and suspicious activity linked to unlawful employment and to employers, including schemes connected to immigration. On June 8, the Consumer Financial Protection Bureau issued a statement reminding creditors that existing law requires them to assess a borrower’s ability to repay before offering mortgages and other credit, and that immigration status, lawful presence and employment authorisation may be relevant to that assessment where removal could affect future income. The bureau also stressed that immigration statuses vary and that lenders cannot assume different statuses carry the same ability to pay — a nuance that has become central to the debate about how the guidance will be applied in practice.
How the Trump financial order would change bank risk checks
At the heart of the order is a list of warning signs, described in the order as red flags and typologies, that banks are expected to take into account. They include patterns suggesting payroll tax evasion by employers or labour brokers, including failures to withhold or remit federal taxes for workers without authorisation. They include the use of foreign identity documents, nominee accounts, shell companies or complex funnel structures to obscure who ultimately owns an account or where payroll money is really going. They include the use of unregistered money service businesses, third-party payment processors or peer-to-peer platforms to make off-the-books wage payments, and repeated cash withdrawals or deposits just below reporting thresholds that line up with payroll cycles.
The list also covers financial activity that may indicate labour trafficking or forced labour, and the use of an Individual Taxpayer Identification Number, or ITIN, to open an account or obtain credit where the applicant lacks verified lawful immigration status. An ITIN is issued by the Internal Revenue Service to people who need a taxpayer identification number but are not eligible for a Social Security number. Possessing or using one is not, by itself, evidence of unlawful presence or of financial wrongdoing: ITINs are used by a range of taxpayers, including some people who are lawfully present, to file tax returns and pay taxes. The order itself acknowledges that an ITIN facilitates tax compliance, while saying that its use in place of a Social Security number or a valid work-authorised visa may be treated as a risk factor calling for enhanced due diligence.
Foreign consular identification cards receive separate attention in the order. The president directed Treasury and the regulators to examine what the order calls potential threats to the integrity of the American financial system posed by such cards. Consular cards are issued by foreign governments to their nationals living abroad and have been accepted by some American banks as one form of identification when opening accounts. Supporters of stricter rules argue that reliance on such documents can weaken identity checks. Critics of that approach argue that banks already verify identity through multiple means and that narrowing accepted documents would mainly affect people with limited access to other identification, without necessarily catching sophisticated laundering networks that use shell companies and professional intermediaries.
The lending side of the order may prove just as consequential as the anti-money-laundering side, because it reaches into ordinary credit decisions. Under the Truth in Lending Act, lenders must assess a borrower’s ability to repay certain loans. The administration’s position is that a borrower who faces removal, or whose employer may stop employing them to comply with immigration law, faces a foreseeable risk of losing the wages on which repayment depends, and that lenders should weigh that risk. The June 2026 consumer bureau statement put the point in advisory terms: it said immigration status, lawful presence and work authorisation may be considered as part of an ability-to-repay analysis where they could affect income, particularly if removal could interrupt that income.
The scale of the lending at issue is a key point of contention. Research by the Urban Institute, cited in analysis of the order, estimated that lenders issued roughly 5,000 to 6,000 mortgages a year to customers using ITINs during the period studied. That is a small fraction of the overall American mortgage market, and government-sponsored enterprises Fannie Mae and Freddie Mac typically do not guarantee mortgages for such borrowers, which has historically made banks cautious about extending this credit. Supporters of the order argue that the absolute number matters less than the principle: if underwriting ignores a foreseeable loss-of-income risk, they say, the system is mispricing risk. Critics argue the opposite: that a market this small cannot plausibly explain higher fees or interest rates for other borrowers, and that the administration’s cost claim is therefore overstated.
The same tension runs through the debate about the order’s effect on financial inclusion. Consumer advocates warn that when regulators tell banks to treat immigration-related factors as risk signals, banks — which face penalties for missing illicit activity — may respond by avoiding entire categories of customers rather than making fine-grained judgments. That practice, known as de-risking, can leave people without accounts, pushing them towards cash, informal money transmitters or cheque-cashing services that are harder for law enforcement to monitor and more expensive for the user. Advocates argue that outcome would cut against the order’s own anti-crime purpose, since money that moves outside the regulated banking system is harder to trace.
The National Consumer Law Center made that argument directly after the June 2026 bureau statement, describing the administration’s effort as an attempt to cut large numbers of immigrants out of the mainstream financial system and to use banks as a tool of immigration enforcement. Its lawyers also made a narrower legal point: the bureau’s statement was advisory only and stated that it had no legally binding effect, so it could not by itself impose a hard requirement that lenders consider immigration status. They added that lenders are not required to consider income changes that cannot reasonably be anticipated, and that with about 24 million non-citizens in the United States holding a wide variety of statuses, lenders cannot reliably predict which individual customers would be detained or removed.
That unpredictability point connects to the discrimination concern, which is perhaps the most serious legal risk facing lenders that act on the new guidance. The Equal Credit Opportunity Act prohibits discrimination in lending on the basis of national origin, among other characteristics. Consumer advocates warn that if banks rely on immigration status, or on perceived immigration status — for example, by questioning customers with foreign-sounding names or foreign documents more aggressively — they risk violating that prohibition. The consumer bureau’s own statement acknowledged the complexity by noting the variety of immigration statuses, but advocates say the guidance remains, in the words of one National Consumer Law Center lawyer, unclear about where the line falls between a legitimate ability-to-repay judgment and an unlawful proxy for national origin.
Privacy is a related concern. The order directs regulators to consider changes that would make it easier for financial institutions to collect customer data, including immigration status and employment authorisation. Supporters say banks already collect extensive identity information under existing anti-money-laundering rules, so the change is incremental. Critics say immigration status is more sensitive than ordinary identity data, that its collection creates new risks if data is breached or shared with enforcement agencies, and that customers may avoid banks altogether if they believe opening an account could expose them or their families to immigration consequences. Neither the order nor the June advisories resolved how such data would be stored, shared or protected, leaving those questions to the rulemaking process.
Industry reaction has been more muted than the advocacy debate, in part because banks are waiting to see the proposed rules. Law firm analyses of the order have noted that it backs away from an earlier reported idea of requiring banks to collect and verify citizenship data for new and existing customers, and instead frames immigration-related information as one factor in a risk-based system. That framing gives banks discretion, but discretion is itself a compliance risk: a bank that treats status too lightly could face criticism from regulators for missing red flags, while a bank that treats it too heavily could face discrimination claims from customers and lawsuits from advocacy groups. Until Treasury publishes proposed regulatory text, banks cannot know exactly where regulators will draw that line.
The broader political context helps explain why the order arrived when it did. The administration has made immigration enforcement a central theme of its second term, and the financial order extends that theme into a domain — banking regulation — that previous administrations generally treated as separate from immigration policy. Earlier in 2026, the administration also pursued a separate fair-banking executive order aimed at what it called politicised debanking, in which banks were accused of restricting customers over political or religious views. The two efforts sit uneasily together in the eyes of critics, who note that one order presses banks not to deny services on the basis of beliefs, while the other presses them to scrutinise customers on the basis of status. Supporters reject that comparison, arguing that immigration status is a legitimate risk factor tied to lawful presence and income stability, whereas political belief is not.
What happens next will be determined largely by regulators, courts and the banks themselves. Treasury’s proposed changes to Bank Secrecy Act rules will go through a public comment process, giving banks, consumer groups and immigration advocates a formal opportunity to argue about scope, definitions and safeguards. Lenders will watch whether the consumer bureau converts its advisory statement into a binding rule or leaves it as guidance. Courts may eventually be asked whether a lender’s reliance on immigration status in a particular case crossed into national-origin discrimination, or whether a bank’s refusal of services was justified by documented risk. And Congress may weigh in, either by endorsing the administration’s approach in legislation or by challenging it through oversight hearings.
For customers, the immediate practical advice remains unchanged by the order itself: no existing account has been ordered closed by the executive order, and no new prohibition on opening accounts has taken effect. What has changed is the regulatory climate in which banks make those decisions. Customers who use ITINs, consular cards or other non-standard identification may face more questions, longer reviews or requests for additional documentation as banks adjust their procedures to the new advisories. People who are lawfully present should not, under existing anti-discrimination law, be denied credit solely because of national origin, but the interaction between that protection and the new risk guidance is precisely the grey area that the coming rules will need to clarify.
The order therefore sits at the intersection of three policy areas that are usually handled separately: financial crime prevention, immigration enforcement and consumer protection. Its supporters present it as a long-overdue recognition that those areas overlap in practice, because illicit employers, traffickers and launderers use the same banks as everyone else. Its critics present it as a category error, arguing that tools designed to catch laundering networks will, when pointed at immigration status, mostly catch ordinary workers and small employers while missing the sophisticated actors who hide behind corporate structures. Which account proves closer to the truth will become clearer only when the proposed rules appear, banks respond, and the first disputes reach regulators and courts. The debate over the scrutiny of noncitizen status in federal processes shows how contested that boundary has already become in other arenas.
Sources
USN reviewed reporting from multiple outlets for this story. Read more from Debevoise, National Consumer Law Center and House Republican Policy Committee.