Washington, D.C. – President Donald Trump signed an executive order Tuesday directing banks and financial institutions to more closely examine customers’ citizenship status and financial activity as part of his administration’s broader immigration enforcement agenda.
The order instructs the Treasury Department to issue advisories identifying “red flags” tied to potential immigration or financial violations. These include payroll tax evasion, identity concealment, use of third-party payment systems, labor trafficking, and the use of taxpayer identification numbers to obtain credit or banking services.
The administration says the move is intended to strengthen national security and prevent unlawful access to the U.S. financial system. The order specifically warns about risks involving identification documents issued by foreign embassies and consulates.
The directive stops short of requiring banks to directly collect citizenship information from customers, a proposal previously floated by Treasury Secretary Scott Bessent earlier this year. Banking industry groups had warned such a requirement could remove millions of people from the traditional financial system and create economic and security complications.
Immigration advocates and tax experts say groups likely to be affected include DACA recipients and immigrants with Temporary Protected Status. Critics also argue the policy could increase fears within immigrant communities and push more financial activity outside regulated banking systems.
The Treasury Department is expected to work with regulators on additional changes involving customer due diligence rules under the Bank Secrecy Act.
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