Trump’s new bank order raises questions for account holders
Trump’s new bank order raises questions for account holders
Peter Burditt, Nashville TennesseanThu, May 21, 2026 at 8:07 PM UTC
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President Donald Trump signed yet another executive order aiding his immigration crackdown, but instead of leveraging law enforcement, the president will lean on banking regulations to help with his agenda.
On May 19, Trump signed an executive order directing the Treasury Secretary to issue an advisory to banks to identify suspicious activity relating to tax evasion, concealment of true account ownership, off-the-books wage payments, labor trafficking and the use of individual taxpayer identification numbers to open accounts or obtain credit without verified legal presence in the U.S.
"Today, President Donald J. Trump signed an Executive Order 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 beginning of Trump's order states.
While the directed advisory applies to an array of financial criminal activity that also pertains to American citizens, the order encourages banks to zero in on risks pertaining to undocumented immigrants, people without work authorization and individuals using Individual Taxpayer Identification Numbers (ITIN) or alternative IDs to open bank accounts and receive financial services.
How exactly does Trump's executive order impact non-U.S. citizens?
Trump's new order does not prohibit non-U.S. citizens from opening bank accounts. However, under the order, banks are directed to attentively look into people using ITINs and alternative IDs, as well as determine the risks of people who are susceptible to deportation and have income instability.
The order argues that weak identity checks for bank accounts opens the door for money laundering, drug trafficking and terrorist financing. The order also notes that it is financially risky to lend money and provide financial services to undocumented immigrants, as potential deportation and/or the loss of wages threatens the structure of the national banking system.
Chinese money laundering networks and Mexican drug cartels were cited in the order, claiming that the former has successfully laundered $312 billion through U.S. banks and the latter has used to system to finance fentanyl trafficking.
Non-U.S. citizens will still be able to open bank accounts, but if they are using an alternative ID or an ITIN, the bank they are opening their account in may refuse their business if the account or the identification used raises any red flags.
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What else stands to change under Trump's executive order?
President Donald Trump arrives at the Coast Guard Academy's commencement ceremony at Cadet Memorial Field on May 20, 2026.
Beyond anti-financial crime enforcement, identity verification and lending standards, Trump's executive order also encourages regulators to consider changes to the Bank Secrecy Act.
The potential changes to the Bank Secrecy Act could give authorities greater ability to obtain additional account information when investigating suspicious and potential nefarious activity. The order places an emphasis on risks associated with foreign consular ID cards.
What have critics said about the executive order?
Last month Reuters reported that banks would have a near-impossible time verifying the immigration and citizenship status of all clients.
Prior to the signing of the order, trade groups explained that an order such as this one could result in the debanking of millions of customers and reduce financial access to citizens, Reuters also reported.
"Obviously, the administration wants greater controls on immigration, but the bank regulators have always wanted as many financial transactions to go through the traditional financial systems," said Ed Mills, a Washington policy analyst with Raymond James.
"This would have removed a lot of individuals from the financial system, which could create a national security risk as well," he added.
Trump's newest order is not officially law. Rather, it is a directive telling agencies how to enforce or interpret existing laws, setting in motion regulatory changes that could later be signed into law.
Peter Burditt covers trending news and service journalism for The Tennessean. Contact him at PBurditt@nashvill.gannett.com
This article originally appeared on Nashville Tennessean: What Trump’s bank order means for immigrants, borrowers in Tennessee
Source: “AOL Breaking”
