A new executive order from President Donald Trump, addressing the nation’s security, includes an order that banks be advised of the possibility of default if they make loans to illegal aliens who may be deported.
It’s one of several actions Trump is calling for in his new order, which is intended to “protect American’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 order tells the Secretary of the Treasury “to issue a formal advisory to financial institutions identifying red flags and suspicious activity patterns tied to 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 also directed Treasury to “propose changes to Bank Secrecy Act regulations to strengthen customer due diligence requirements and the authority to obtain additional information when warranted” in order to identify the true account owners.
Additionally, he directs regulators to consider strengthening customer ID requirements, and also he calls for processes to let institutions identify the true owners of accounts when necessary to assess risks related to unlawful activity.
Among the direct impact to consumers would be that banks now could legally factor immigration status into underwriting decisions for everyday consumer credit products, including mortgages, auto loans, and credit cards.
“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,â Trump wrote in the text of the order.
Federal financial regulators, including the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), have been given a 60-day window to issue formal guidance to banks on how to manage the credit risks associated with non-work-authorized populations.
Trump signs executive order to stop banks from extending credit to illegal aliens https://t.co/eM3TlewhXy
â Off The Press (@OffThePress1) May 20, 2026
President Trump signs executive order cracking down on financial institutions extending services and credit to the “inadmissible and removable alien population” as well as “illicit cross-border financial activity.” pic.twitter.com/FVDf1EdSw5
â Border Hawk (@BorderHawkNews) May 20, 2026
The order is called, “Restoring Integrity to Americaâs Financial System.”
National security threats and financial fraud prompted the order, the White House said.
It calls for the Treasury Department to within 60 days issue a formal advisory to banks detailing âred flagsâ and suspicious activities, including employers evading payroll taxes for unauthorized workers, the use of foreign consular ID cards, and the use of Individual Taxpayer Identification Numbers (ITINs) to open bank accounts or secure credit products without verified lawful immigration status.
In his order, the president cited specifics he’s trying to address: “Gaps in customer identification practices have allowed terrorists, drug traffickers, money launderers, and other criminal networks to exploit U.S. financial institutions to move illicit funds and evade law enforcement,” and “Chinese money laundering networks have used U.S.-based accounts to launder over $312 billion for criminal organizations, including to finance human trafficking.”
