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President Donald Trump signed a new executive order directing federal regulators to tighten banking oversight tied to illegal immigration, payroll fraud, labor trafficking and the use of taxpayer identification numbers without verified legal status.
By yourNEWS Media Newsroom
President Donald Trump signed a sweeping executive order Tuesday aimed at restricting access to the U.S. financial system for individuals residing in the country illegally, while increasing federal scrutiny of banking practices connected to unlawful employment, tax evasion and suspected illicit financial activity.
The new order, titled “Restoring Integrity to America’s Financial System”, directs the Treasury Department and federal banking regulators to strengthen enforcement mechanisms involving customer identification, suspicious financial transactions and the use of Individual Taxpayer Identification Numbers, commonly known as ITINs.
The administration said the action is intended to address vulnerabilities involving unauthorized labor markets, concealed payroll systems and the use of American financial institutions by individuals lacking lawful immigration status.
Under the executive order, Treasury Secretary officials must issue a formal advisory to financial institutions within 60 days warning banks and lenders about risks associated with what the administration described as the exploitation of the U.S. financial system by “non-work authorized populations and their employers.”
The advisory is expected to outline financial patterns regulators believe are associated with unlawful employment schemes and related criminal activity.
According to the order, regulators will specifically focus on “evidentiary patterns of payroll tax evasion by employers or labor brokers,” including situations involving the alleged failure to withhold or remit federal employment taxes tied to unauthorized workers.
The administration also identified concerns involving the use of foreign identity documents, shell companies, nominee accounts and “funnel” financial structures allegedly designed to conceal the true ownership of accounts or disguise payroll transactions.
The order further directs regulators to examine the use of unregistered money service businesses, third-party payment systems and peer-to-peer financial platforms allegedly used to facilitate “off-the-books” wage payments outside standard reporting requirements.
Federal agencies were also instructed to monitor repeated small cash withdrawals or deposits that correspond with payroll cycles, a practice commonly referred to as “structuring” or “micro-structuring,” which authorities say can be used to evade financial reporting thresholds under federal law.
The executive action additionally highlights concerns about labor trafficking and forced labor operations in which illegal proceeds are allegedly blended with legitimate business revenue or transferred overseas.
Another major provision addresses the use of ITINs to open bank accounts or obtain credit products.
The order states that while ITINs were originally designed to facilitate tax compliance, their use in place of Social Security numbers or valid work-authorized visas may trigger enhanced scrutiny by financial institutions.
Federal regulators were directed to ensure that banks maintain the authority to seek additional information concerning immigration status and employment authorization when evaluating fraud risks, identity concerns or other suspicious activity.
The administration also ordered federal agencies to begin reviewing possible revisions to regulations under the Bank Secrecy Act to strengthen customer due diligence standards and customer identification requirements across covered financial institutions.
The order specifically notes that regulators should evaluate risks associated with foreign consular identification cards and how such documents may affect the integrity of the U.S. banking system.
In addition to banking oversight, the order targets lending standards involving borrowers lacking legal work authorization.
The Consumer Financial Protection Bureau was instructed to consider guidance clarifying that potential deportation or loss of employment income may affect a borrower’s ability to repay loans under existing federal “ability-to-repay” standards.
Federal financial regulators were also directed to issue additional guidance regarding potential credit risks associated with lending to unauthorized populations.
The administration framed the order as part of a broader immigration enforcement effort focused not only on border security and deportation operations, but also on limiting access to financial systems that officials argue enable unlawful employment networks and underground labor markets.
The executive order follows a series of Trump administration initiatives aimed at increasing workplace enforcement, strengthening deportation procedures and expanding federal coordination targeting illegal immigration-related activity.
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