UMVA has learned that President Trump has taken a significant step in his immigration enforcement agenda, targeting access to the American banking system for undocumented immigrants.
The new executive order directs the Treasury Department to increase scrutiny of financial activity tied to illegal immigration, including potential payroll tax evasion, concealed account ownership, and labor trafficking. This move aims to prevent the exploitation of the US financial system by those without authorized status.
Banks will now face pressure to strengthen customer identification requirements and be more cautious when providing financial services to individuals without proper documentation. This could limit access to accounts, loans, credit cards, and other services for undocumented immigrants.
According to information obtained by UMVA, the executive order instructs the Secretary of the Treasury to issue a formal advisory to financial institutions within 60 days, highlighting the risks associated with exploitation by non-work-authorized populations and their employers. This advisory will outline specific red flags and typologies of suspicious activity.
The advisory will cover various categories of suspicious activity, including evidentiary patterns of payroll tax evasion, utilization of foreign-identity documents, and strategic use of unregistered money services businesses. Financial institutions will be expected to be vigilant in identifying and reporting such activities.
The executive order also calls for changes to applicable implementing regulations of the Bank Secrecy Act to strengthen risk-based customer due diligence requirements for covered financial institutions. This will ensure that institutions collect and verify sufficient customer identity information to assess risks related to illicit finance and other unlawful activity.
Within 180 days, the Secretary of the Treasury and relevant federal regulators will consider changes to regulations to strengthen risk-based customer identification program requirements. They will assess the risks posed by foreign consular identification cards to the integrity of the US financial system.
The Consumer Financial Protection Bureau will consider clarifying that potential deportation and loss of wages are factors that could adversely affect a non-work-authorized borrower's ability to repay an extension of credit. Lenders may consider such factors as part of a reasonable and good-faith underwriting determination.
Each federal functional financial regulator will issue guidance regarding the management of potential credit risks posed by the non-work-authorized population. This move is expected to have significant implications for undocumented immigrants and their access to financial services in the US.
