Trump Administration Cracks Down on Financial System Use by Undocumented Immigrants

Treasury Secretary Scott Bessent announced a crackdown on the use of the U.S. financial system by undocumented immigrants, cartels, and criminal enterprises. The initiative aims to prevent fraud, payroll schemes, and illicit financing by tightening oversight of financial activity linked to unauthorized employment.

This effort implements a May 19 executive order signed by President Donald Trump titled "Restoring Integrity to America's Financial System." The order directs the Treasury Department and federal banking regulators to strengthen customer identification and due-diligence rules, requiring banks to reassess credit risk for borrowers who lack work authorization.

Several agencies have already taken action. The Financial Crimes Enforcement Network issued guidance in June to help banks identify patterns of identity theft and unlawful employment, while the Office of the Comptroller of the Currency issued an advisory on loan repayment capacity. Meanwhile, the Consumer Financial Protection Bureau is currently evaluating if deportation risks should influence loan repayment determinations.

The administration has established specific deadlines for further regulatory action. New customer due-diligence rules are expected by August 17, with a broader customer identification proposal due by November 16.