Trump’s order to review bank accounts in the United States is now in effect. Until now, banks had not collected information about their customers’ citizenship or immigration status. Now, President Donald Trump signed an executive order asking them to examine citizenship more closely.
Treasury Secretary Scott Bessent declared in April that there should be stricter rules for opening bank accounts. According to the Associated Press, Bessent said: “Why can unknown foreign citizens come and open a bank account?” This question marked the beginning of the new banking policy.
The executive order considers the use of an ITIN suspicious for obtaining credit products. The ITIN is the Individual Taxpayer Identification Number. It is used when the applicant lacks a verified legal immigration status by the government.
What Changes With Trump’s New Executive Order?
The order instructs bank regulators and government departments to search for signs. They must identify whether undocumented immigrants are opening accounts or obtaining loans or credit cards. The goal is to control illegal immigration through the financial system.
The executive order is less strict than banks initially expected. Earlier reports suggested Trump was preparing a rule that would make information collection mandatory. The new version only offers guidelines rather than a total requirement.
Trump justifies the order by saying that banks would face credit risks if they deport customers. Loans could not be repaid if the customer is deported. His administration would not allow risks to the financial system resulting from credit to inadmissible populations.
Banks had pressured for months to prevent Trump from issuing a mandatory order. They argued it would be costly and require a large amount of administrative procedures. Since the order only offers guidelines, it appears that banks managed to convince the White House.
How Does This Affect Undocumented Immigrants?
Civil rights advocacy groups had stated that any order would require information collection. This would likely cause undocumented people to be shut out of the financial system. It would thus increase the number of people without access to basic banking services.
A study by the Urban Institute cites that between 5,000 and 6,000 mortgages have been granted to customers with ITINs. ITINs are typically used by undocumented workers instead of Social Security Numbers. These figures show the economic impact of immigrants on the banking sector.
