Trump tells regulators to advise banks on services to immigrants
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US President Donald Trump signed an order calling on the Federal Reserve to conduct a similar review and evaluate frameworks governing access to reserve bank payment accounts.
PHOTO: REUTERS
WASHINGTON – US President Donald Trump signed an executive order on May 19 that directs regulators to issue guidance on banking services to undocumented migrants, in a move that could tighten access to the financial system amid the administration’s immigration crackdown.
The order directs the Treasury secretary and other financial regulators to “consider changes to the Bank Secrecy Act to strengthen customer identification programme requirements, including accounting for the risks that foreign consular identification cards pose to the US financial system”, according to a White House fact sheet.
It also calls on the Treasury secretary to issue a formal advisory to “financial institutions identifying red flags and suspicious activity patterns”.
The move is less stringent than plans previously reported under which the Trump administration considered requiring banks to collect customers’ citizenship information.
That proposal faced sharp push back from banking groups worried about the feasibility of checking customers’ immigration status, Bloomberg News reported in March. Lenders also raised concerns about possible costs and damage to the economy if individuals lost access to the banking system.
Mr Trump also signed a separate order on May 19 the White House said was intended to “streamline regulations and promote financial innovation and collaboration between” fintech firms, financial institutions and regulatory agencies.
That order directs regulators to “review existing regulations, guidance, supervisory practices, and application processes” with the aim of identifying practices which could be updated to better “facilitate innovation and greater competition in the provision of financial services”, according to a fact sheet.
It calls on the Federal Reserve to conduct a similar review and evaluate frameworks governing access to reserve bank payment accounts.
A slew of fintechs have tried to secure a more permanent foothold in the US financial system by applying for various forms of bank charters.
The Fed said in 2025 it was exploring a model for so-called “skinny” master accounts, or stripped-down versions of the accounts banks use to move trillions of dollars through Fed systems daily.
It awarded Kraken a limited purpose account in March, making it the first digital asset bank to gain direct access to the infrastructure. BLOOMBERG
