President Donald Trump on Tuesday issued an executive order to protect U.S. financial institutions from illegal immigrants and foreign fund transfers that support crime.
“My Administration will not tolerate national security and public safety risks caused by illicit cross-border financial activity, nor will it permit risks to our financial system posed by the extension of credit or financial services to the inadmissible and removable alien population,” the order said.
“Even the provision of the most basic financial services, absent proper know-your-customer practices, can be abused to facilitate the funding of activities that pose significant threats to national security and public safety,” the order added.
“Low-dollar cross-border funds transfers have been used to facilitate or commit terrorist financing, narcotics trafficking, human trafficking, and other illegal activity,” Trump said, noting that Mexican-based cartels and Chinese money laundering networks have abused the financial system.
The order further noted the risks associated with extending credit to illegal immigrants who may be deported.
“Lending to aliens without legal work authorization or who face a substantial loss-of-wage risk creates a structural ‘ability to repay’ deficiency that undermines the safety and soundness of the national banking system,” the order said.
A fact sheet accompanying the order said Trump acted “to protect America’s financial system from illicit activity, strengthen customer identification requirements for financial institutions, and address the credit risks posed by extending financial services to non-work authorized illegal aliens.”
The fact sheet noted that Secretary of the Treasury Scott Bessent will issue guidance to financial institutions so they can crack down on “payroll tax evasion, concealment of true account ownership, off-the-books wage payments and structuring schemes, labor trafficking, and the use of individual taxpayer identification numbers to open accounts or obtain credit without verified legal presence.”
Trump moves to tighten banking access for non-citizens https://t.co/0xumwDuTCf
— TIME (@TIME) May 20, 2026
Ensuring banks know the real identity of their customers will also ensure “institutions can identify the true owners of accounts when necessary to assess risks related to unlawful activity,” the fact sheet said.
The order also requires financial regulators to modify existing rules to reduce “risks related to unlawful activity.”
Regulators will “issue guidance on managing the credit risks of extending loans and financial services to illegal aliens without work authorization.”
The fact sheet said that when financial institutions do not know who their customers really are, “terrorists, drug traffickers, money launderers, and other criminal networks” can “exploit U.S. financial institutions to move illicit funds and evade law enforcement.”
The fact sheet noted that giving credit to illegal immigrants who could be deported “creates structural credit risks that threaten the safety and soundness of the national banking system.”
“Employers of illegal aliens may underreport wages and evade payroll taxes, distorting the income data that underpins credit underwriting and obscuring risk across the financial system,” the fact sheet said.
“When banks are forced to absorb these elevated credit risks, the costs are passed on to American consumers in the form of higher fees and interest rates — restoring sound underwriting standards puts money back in the pockets of law-abiding Americans.”
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