Trump Signs Order Aimed At Preventing Illicit Financial Activity

Trump’s order weaponizes the Bank Secrecy Act to fuse immigration enforcement with financial surveillance. By treating foreign consular IDs and ITINs as potential markers of money laundering, terrorism, or trafficking, it pushes banks to see millions of non‑citizens as inherent risks. Everyday behaviors—cash withdrawals, informal wage payments, small business shell structures—are recast as warning signs, even when tied to people simply working, paying taxes, and trying to live.

At the same time, the administration moves to redefine certain refundable tax credits as “federal public benefits,” narrowing eligibility for immigrants who already contribute to the system. The White House frames this as protecting “law‑abiding Americans” from subsidizing “high‑risk borrowers,” despite scant evidence that undocumented borrowers drive higher rates or systemic danger. The result is a two‑tier financial reality: citizens with access and options, and non‑citizens pushed further into the shadows—unbanked, unprotected, and more vulnerable to exploitation.

Trump’s 2026 Executive Order Ties Banking Rules to Immigration Status

May 19 order directs regulators to treat ITINs and consular IDs as potential risk factors under the Bank Secrecy Act
On May 19, 2026, President Donald Trump signed Executive Order “Restoring Integrity to America’s Financial System.” The order explicitly directs the Treasury Department, FinCEN, the CFPB, and federal banking regulators to strengthen the application of the Bank Secrecy Act (BSA) by linking immigration status and work authorization to financial risk assessments.
What the Order Requires
The directive identifies several specific “red flags” that financial institutions should consider during customer due diligence and when filing Suspicious Activity Reports. These include:

Use of an Individual Taxpayer Identification Number (ITIN) to open deposit accounts or obtain credit when the applicant lacks verified lawful immigration status.
Reliance on foreign consular identification cards (such as the Mexican Matrícula Consular).
Patterns involving off-the-books wage payments, shell companies, funnel accounts, and cash structuring around payroll cycles.
Financial activity that may indicate labor trafficking or forced labor.

A companion FinCEN advisory released on June 5, 2026, expanded on these typologies and encouraged banks to apply enhanced scrutiny when these factors appear alongside other risk indicators.
The order also sets clear timelines:

60 days — Issuance of the FinCEN advisory (already completed).
90 days — Proposed changes to BSA customer due diligence regulations.
180 days — Review of Customer Identification Program rules, with specific attention to the risks posed by consular identification documents.

In addition, the Consumer Financial Protection Bureau was directed to consider how potential loss of income due to deportation should factor into lenders’ “ability-to-repay” assessments.
The Tax Credit Dimension
Separately, in November 2025 the Treasury Department announced plans to reclassify the refundable portions of several tax credits — including the Earned Income Tax Credit (EITC), Additional Child Tax Credit, and American Opportunity Tax Credit — as “federal public benefits” under the 1996 welfare reform law (PRWORA).
This change would bar undocumented immigrants from receiving the refundable amounts, even if they file taxes and pay into the system using an ITIN. The stated goal is to reserve taxpayer-funded benefits for those legally entitled to them.

Critics argue that the policy effectively weaponizes anti-money laundering infrastructure to conduct immigration enforcement through the back door. They warn that millions of tax-paying non-citizens could face increased scrutiny, account restrictions, or loss of access to basic financial services, pushing more people into the informal economy and increasing vulnerability to exploitation.
Supporters contend that the measures close real loopholes exploited by criminal networks involved in human trafficking, payroll fraud, and money laundering tied to unauthorized employment. They emphasize that ITINs remain valid for tax filing and that the changes are risk-based rather than a blanket prohibition on banking access.

The executive order does not immediately close accounts or ban ITIN users from the banking system. Implementation will depend on how banks interpret the new guidance and how regulators enforce the forthcoming BSA rule changes.
The result is likely to be a more fragmented financial landscape: smoother access for citizens and lawfully present residents, and heightened barriers and monitoring for non-citizens — particularly those without work authorization.
As regulatory proposals are developed over the coming months, both immigrant advocates and financial institutions will be watching closely to see how these policies translate into day-to-day banking practices.