WASHINGTON (TNND) — President Donald Trump has signed an executive order mandating that banks closely scrutinize the nationality and immigration status of their customers. This measure forms part of a larger initiative aimed at combatting illegal immigration and financial crime.
The executive order, titled “Restoring the Health of America’s Financial System,” instructs the Treasury Department and other federal agencies to enhance payment verification procedures, bolster fraud screening measures, and streamline the government’s financial systems to improve tracking of taxpayer funds.
In his executive order, President Trump emphasized the administration’s commitment to addressing the national security and public safety challenges posed by illicit cross-border financial activities. He stated that expanding credit and financial services to inadmissible foreign nationals poses unacceptable risks to the financial system.
The White House aims to tackle improper payments, money laundering, and financial fraud by modernizing identity verification and transaction processing methods used by federal agencies. Government officials estimate that fraud and payment errors result in hundreds of billions of dollars in losses each year.
Treasury Secretary Scott Bessent recently expressed the need for more stringent regulations regarding bank account openings. He questioned, “Why would an unknown foreigner be able to come and open an account?” His remarks indicate a push for stricter identity verification protocols.
The banking sector has actively opposed the administration’s move, arguing that requiring citizenship verification would impose heavy costs and create bureaucratic hurdles. Immigration advocates have warned that enforcing such requirements could drive undocumented immigrants out of the financial system, leading to an increase in individuals without bank accounts.
The executive order stipulates that federal agencies must share more comprehensive payment and account data with the Treasury Department. This aims to enhance fraud detection systems and identify suspicious transactions prior to the disbursement of federal funds.
Additionally, the directive calls for a reduction in the number of non-Treasury spending bureaus, which are agencies that independently disburse payments to the federal government. It also seeks to unify financial management systems under the oversight of the Treasury to foster greater transparency and accountability.
The order highlights the threats posed by low-dollar cross-border financial movements, which have been linked to activities such as terrorist financing, drug trafficking, and human trafficking. Recent investigations have revealed significant financial connections between U.S.-based accounts and Mexico-based cartels involved in the fentanyl trade. Furthermore, foreign passport holders have reportedly utilized American accounts to launder over $312 billion for criminal organizations, with human trafficking being a noted concern. The order underscored the necessity for robust customer identification programs and heightened due diligence to address these vulnerabilities.
_________________
Editor’s note: The Associated Press contributed to this report.
