A checking account. A mortgage application. A routine deposit. Under an executive order signed Tuesday by President Donald Trump, each of these everyday transactions could become an immigration enforcement checkpoint — though the final text falls well short of what the White House originally planned.

The order, titled “Restoring Integrity to America’s Financial System,” directs the Treasury Department and federal banking regulators to treat a customer’s immigration status as a risk factor when evaluating accounts, loans, and credit. Earlier drafts would have made citizenship verification mandatory for all bank customers. That proposal triggered months of intense Wall Street lobbying and was ultimately softened into guidance.

Treasury Secretary Scott Bessent previewed the direction last month. “There should be stricter rules” to open bank accounts, he said, asking: “So how do you know your customer if you don’t know if they have legal or illegal status, whether a U.S. citizen or green card holder?”

Even so, the order represents a significant expansion of immigration enforcement into ordinary commercial life — achieved without a vote in Congress. It arrives amid a broader crackdown that has included mass detentions and deportations, increased visa scrutiny, and restrictions on immigrants’ access to public services, according to TIME.

What Banks Will Actually Have to Do

The order operates on three timelines. Within 60 days, Treasury must issue an advisory describing “red flags” associated with undocumented customers — patterns including payroll tax evasion by employers, shell companies used to obscure account ownership, and unregistered money services facilitating off-the-books wage payments.

Within 90 days, Treasury and regulators must propose Bank Secrecy Act changes strengthening customer due diligence requirements. Within 180 days, they must consider tighter identification rules accounting for what the order calls “the risks foreign consular identification cards pose to the integrity of the United States financial system.”

Among the red flags: the use of an Individual Taxpayer Identification Number, or ITIN. The IRS issues these to anyone who needs to file federal taxes, regardless of immigration status — a mechanism specifically designed to encourage tax compliance. Under this order, using an ITIN to open an account or apply for credit may be identified as “a risk factor requiring enhanced due diligence.”

The Consumer Financial Protection Bureau has already moved. A spokesperson told Semafor that officials submitted a proposed rule called “statement on ability to repay and immigration status,” clearing the way for lenders to consider potential deportation and wage loss when evaluating loan applications — a change that would also affect immigrants with legal status.

Millions Pushed Toward the Shadows

No reliable data exists on how many undocumented immigrants hold US bank accounts; banks have never systematically collected citizenship information. A study by the Urban Institute estimated that between 5,000 and 6,000 mortgages were issued to ITIN holders — a fraction of the total market. Fannie Mae and Freddie Mac are generally reluctant to insure such mortgages.

The practical impact will land in everyday financial access, not lending. Immigration advocates warn that the order will push undocumented residents out of the regulated banking system, swelling the ranks of the “unbanked” — people who cannot store savings securely, pay rent electronically, or receive wages through direct deposit. The order’s stated goal of reducing fraud could, paradoxically, push more activity into the shadow economy it claims to combat.

Banks Caught Between Two Sets of Rules

Wall Street fought the original mandatory-collection proposal hard. Executives warned it would be enormously costly and expose institutions to lawsuits from customers — including millions of US citizens — who lack readily available passports or citizenship documents. According to TIME, critics argued the proposal risked “debanking” millions of Americans, disproportionately affecting elderly, low-income, and rural residents.

The final guidance-based approach is, in Semafor’s characterization, “a win for Wall Street.” But it leaves banks navigating contradictory pressures. They face federal encouragement to scrutinize immigration status while anti-discrimination laws prohibit denying services based on national origin. Getting that balance wrong in either direction invites litigation.

Enforcement by Administrative Attrition

The banking order extends a pattern already underway. Last November, the Treasury reclassified certain refundable tax credits as “federal public benefits,” barring some non-citizen taxpayers from receiving them even if they file and pay taxes. Tax experts said DACA recipients and immigrants with Temporary Protected Status would be disproportionately affected.

The strategy requires no legislation. The executive branch repurposes existing regulatory authority — over banking supervision, tax administration, anti-money-laundering compliance — to make daily life incrementally more difficult for people without legal status. Each measure can be framed as a technical adjustment. Together, they amount to enforcement by attrition: draining access to savings, credit, and the ordinary tools of economic participation.

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