President Trump has signed an executive order directing federal regulators to push banks toward more aggressive scrutiny of their customers, with the financial activity of immigrants, including individuals with uncertain or pending status, identified as a particular area of concern, according to Newsweek.
The order, titled Restoring Integrity to America’s Financial System, was signed on Tuesday.
According to Newsweek, the Trump administration instructs federal banking regulators to issue guidance within 60 days on how financial institutions should tighten their “know your customer” procedures, particularly when assessing the backgrounds of clients whose immigration status may be uncertain or who may be subject to deportation.
The order, titled Restoring Integrity to America’s Financial System, was signed on Tuesday.
According to Newsweek, the Trump administration instructs federal banking regulators to issue guidance within 60 days on how financial institutions should tighten their “know your customer” procedures, particularly when assessing the backgrounds of clients whose immigration status may be uncertain or who may be subject to deportation.
According to Newsweek, the order falls short of earlier reported plans that would have required banks to collect citizenship information directly from every customer.
Treasury Secretary Scott Bessent had publicly previewed such a mandate in an April interview with Semafor, reportedly questioning why the United States lacks systematic data on who participates in its banking system.
The signed order does not impose that direct citizenship-check requirement. Instead, the document instructs the Treasury Department to publish guidance within 60 days, alerting banks to specific “red flags” that may indicate what the administration characterizes as unauthorized financial activity, Newsweek reported.
Among the warning signs the administration has identified, according to Newsweek: payroll tax evasion, the use of non-U.S. identity documents, and the use of Individual Taxpayer Identification Numbers — known as ITINs — when applying for credit instead of a Social Security number.
The Internal Revenue Service issues ITINs to individuals who are required to file U.S. tax returns but who are not eligible for a Social Security number. For decades, ITINs have allowed undocumented immigrants and many lawfully present non-citizens to file taxes, build credit history, and access basic financial services. According to Newsweek, the White House has signaled that ITIN use in credit applications may now be treated as a potential indicator of unlawful employment.
Treasury Secretary Scott Bessent had publicly previewed such a mandate in an April interview with Semafor, reportedly questioning why the United States lacks systematic data on who participates in its banking system.
The signed order does not impose that direct citizenship-check requirement. Instead, the document instructs the Treasury Department to publish guidance within 60 days, alerting banks to specific “red flags” that may indicate what the administration characterizes as unauthorized financial activity, Newsweek reported.
Among the warning signs the administration has identified, according to Newsweek: payroll tax evasion, the use of non-U.S. identity documents, and the use of Individual Taxpayer Identification Numbers — known as ITINs — when applying for credit instead of a Social Security number.
The Internal Revenue Service issues ITINs to individuals who are required to file U.S. tax returns but who are not eligible for a Social Security number. For decades, ITINs have allowed undocumented immigrants and many lawfully present non-citizens to file taxes, build credit history, and access basic financial services. According to Newsweek, the White House has signaled that ITIN use in credit applications may now be treated as a potential indicator of unlawful employment.
A Real Risk for Mortgages, Auto Loans, and Credit Cards
The administration’s reasoning, according to a White House fact sheet referenced by Newsweek, is that lending to individuals who may eventually face deportation introduces what officials describe as “structural credit risks” to the banking system. The fact sheet argues that when banks are forced to absorb these risks, the costs are ultimately passed to American consumers through higher fees and elevated interest rates.
Newsweek cited a 2024 study from the Urban Institute, a Washington-based think tank, which estimated the ITIN mortgage market remains relatively small — between 5,000 and 6,000 ITIN mortgages were issued in 2023.
But that statistic obscures the broader picture. ITIN borrowing extends well beyond mortgages. Many immigrant families across Massachusetts, Florida, New York, and other diaspora-heavy states use ITIN credit cards, auto loans, and small-business financing as foundational tools for building life in the United States. A tightening of bank policies around these instruments would not affect a marginal slice of the financial system — it would affect families whose economic existence is wired through ITIN-based banking.
Newsweek cited a 2024 study from the Urban Institute, a Washington-based think tank, which estimated the ITIN mortgage market remains relatively small — between 5,000 and 6,000 ITIN mortgages were issued in 2023.
But that statistic obscures the broader picture. ITIN borrowing extends well beyond mortgages. Many immigrant families across Massachusetts, Florida, New York, and other diaspora-heavy states use ITIN credit cards, auto loans, and small-business financing as foundational tools for building life in the United States. A tightening of bank policies around these instruments would not affect a marginal slice of the financial system — it would affect families whose economic existence is wired through ITIN-based banking.
Beyond the human cost, the order raises a fiscal question that Newsweek’s reporting captured concisely. According to the news outlet, the Yale Budget Lab has estimated that increased scrutiny of non-citizens’ financial activity could result in a $479 billion reduction in federal tax revenue over the next decade — driven largely by a projected decline in tax filings as immigrants exit the formal financial system out of fear of exposure.
Newsweek reported that the American Bankers Association issued a measured response to the order. In a statement quoted by the outlet, the association’s president and chief executive, Rob Nichols, said the banking industry shares the administration’s commitment to a “safe, sound, and secure financial system” and that banks would continue working with regulators and law enforcement to identify bad actors.
But Nichols’s statement also signaled a careful balance, according to Newsweek — emphasizing the importance of “maintaining consumer access to banking services,” language that suggests the industry is aware of the order’s potential to drive law-abiding customers away from regulated banking entirely.
A more direct warning came from Kathryn Judge, a professor at Columbia Law School, who Newsweek quoted as saying the order could impose “an inappropriate and costly new set of obligations on banks.” Judge added, according to Newsweek, that if implemented aggressively, the order could create new procedural hurdles affecting nearly any customer seeking basic banking services — and could, by its mere existence, “scare people away from accessing bank services.”
Newsweek reported that the American Bankers Association issued a measured response to the order. In a statement quoted by the outlet, the association’s president and chief executive, Rob Nichols, said the banking industry shares the administration’s commitment to a “safe, sound, and secure financial system” and that banks would continue working with regulators and law enforcement to identify bad actors.
But Nichols’s statement also signaled a careful balance, according to Newsweek — emphasizing the importance of “maintaining consumer access to banking services,” language that suggests the industry is aware of the order’s potential to drive law-abiding customers away from regulated banking entirely.
A more direct warning came from Kathryn Judge, a professor at Columbia Law School, who Newsweek quoted as saying the order could impose “an inappropriate and costly new set of obligations on banks.” Judge added, according to Newsweek, that if implemented aggressively, the order could create new procedural hurdles affecting nearly any customer seeking basic banking services — and could, by its mere existence, “scare people away from accessing bank services.”
What This Means for the Haitian Community
For Haitian families across the United States, the order arrives amid compounding pressure.
The Haitian community is already navigating the legal battle over Temporary Protected Status, now before the U.S. Supreme Court; expanded ICE enforcement under the second Trump administration; and a steady stream of policy signals indicating that immigrants — including those with lawful presence — face escalating scrutiny across multiple dimensions of American life.
The new banking order layers an additional vulnerability onto that landscape. Massachusetts, Florida, and New York — the three largest centers of the Haitian diaspora in the United States — have substantial populations of TPS holders, ITIN filers, and mixed-status households. Many of those families maintain mortgages, auto loans, business credit lines, and remittance accounts that move money to relatives in Haiti.
Under the order’s timeline reported by Newsweek, Treasury Secretary Bessent has 60 days to issue formal guidance to banks. He has also been tasked with assessing whether existing federal bank secrecy regulations require updating to allow banks to “identify the true owners of accounts when necessary to assess risks related to unlawful activity,” Newsweek reported.
Trump separately signed a second financial-services executive order on Tuesday, Newsweek reported, this one focused on financial technology firms and instructed regulators to review rules that may be limiting innovation in the sector.
Civil rights organizations, immigrant advocacy groups, and the banking industry are all expected to weigh in during the 60-day comment and guidance period. Several legal scholars cited by Newsweek and other outlets have suggested the order’s implementation will determine whether it functions as a targeted enforcement tool or as a broader chilling mechanism that pushes millions of Americans away from regulated banking.
The Haitian community is already navigating the legal battle over Temporary Protected Status, now before the U.S. Supreme Court; expanded ICE enforcement under the second Trump administration; and a steady stream of policy signals indicating that immigrants — including those with lawful presence — face escalating scrutiny across multiple dimensions of American life.
The new banking order layers an additional vulnerability onto that landscape. Massachusetts, Florida, and New York — the three largest centers of the Haitian diaspora in the United States — have substantial populations of TPS holders, ITIN filers, and mixed-status households. Many of those families maintain mortgages, auto loans, business credit lines, and remittance accounts that move money to relatives in Haiti.
Under the order’s timeline reported by Newsweek, Treasury Secretary Bessent has 60 days to issue formal guidance to banks. He has also been tasked with assessing whether existing federal bank secrecy regulations require updating to allow banks to “identify the true owners of accounts when necessary to assess risks related to unlawful activity,” Newsweek reported.
Trump separately signed a second financial-services executive order on Tuesday, Newsweek reported, this one focused on financial technology firms and instructed regulators to review rules that may be limiting innovation in the sector.
Civil rights organizations, immigrant advocacy groups, and the banking industry are all expected to weigh in during the 60-day comment and guidance period. Several legal scholars cited by Newsweek and other outlets have suggested the order’s implementation will determine whether it functions as a targeted enforcement tool or as a broader chilling mechanism that pushes millions of Americans away from regulated banking.
Note to Readers:
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https://www.newsweek.com/trump-administration-moves-change-banking-rules-affecting-immigrants-11972142
