President Donald Trump signed an executive order instructing federal regulators and government agencies to assess whether individuals lacking legal immigration status hold bank accounts or have taken out loans and credit cards, according to The Associated Press.
What ultimately emerged was considerably softer than anticipated. Prior reporting had indicated the administration was moving toward a rule that would have compelled banks to collect citizenship data from customers, but no such requirement appeared in the final document, which offers guidance only, according to The Associated Press.
The administration justified the order by pointing to what it described as a systemic financial exposure: If a borrower is deported, the White House argued, outstanding loan balances may never be recovered. The administration said it would not allow "risks to our financial system posed by the extension of credit or financial services to the inadmissible and removable alien population," according to The Associated Press.
Quantifying that risk is difficult, however, given that citizenship and immigration status have never been part of standard bank data collection, leaving no credible public statistics on the matter. One data point comes from research by the Urban Institute: The group found roughly 5,000 to 6,000 mortgages had been extended to holders of Individual Taxpayer Identification Numbers. ITINs serve as a tax-filing substitute for Social Security Numbers among undocumented workers, though mortgage lending to this population remains rare. Government-backed insurers Fannie Mae and Freddie Mac largely decline to back ITIN-holder mortgages, further limiting access to home loans for that group.
For months, banks had pushed hard against a potential mandate, telling the administration that gathering citizenship information would impose heavy costs and administrative burdens. The guidance-only nature of the final order appears to reflect that pressure campaign's success, according to The Associated Press.
Treasury Secretary Scott Bessent previewed the administration's direction in remarks last month, invoking the standard banking compliance principle of knowing one's customer and arguing it was inconsistent with allowing people of unknown immigration status to hold accounts, according to The Associated Press. "Why can the unknown foreign nationals come and open a bank account?" Bessent said.