“President Trump is taking action to restore integrity to America’s financial system, cracking down on illicit activity that threatens national security and ending the extension of credit to high-risk borrowers that American citizens are forced to subsidize,” a White House fact sheet for the order stated. “Restoring sound underwriting standards puts money back in the pockets of law-abiding Americans,” the executive order added.
The official fact sheet claimed that serious gaps in customer identification practices have historically allowed terrorists, drug traffickers, money launderers, and other hostile criminal networks to exploit the U.S. financial grid. The White House also pointed directly to cases of major banks extending mortgages, credit cards, and heavy loans to undocumented immigrants, as well as employers underreporting wages for undocumented employees. They firmly argue that these associated costs are ultimately passed directly onto American consumers in the form of much higher banking fees and skyrocketing interest rates.
According to an independent study by the Urban Institute, lenders previously issued around 5,000 to 6,000 mortgages to customers using ITINs. Traditionally, regular banks are highly reluctant to lend to customers with ITINs, and Fannie Mae and Freddie Mac are typically disinclined to insure mortgages for these specific borrowers.
Furthermore, the new executive order directly instructs the Treasury to consider sweeping regulatory changes under the Bank Secrecy Act. This would enable traditional financial institutions to far more readily collect comprehensive customer data, including official immigration status and employment authorization. Meanwhile, JPMorgan Chase recently commented on account security: “Our company does not close accounts for political or religious reasons. We do close accounts because they create legal or regulatory risk.” At the same time, the White House has overseen a broader deregulatory push, openly embracing cryptocurrency, with Trump pledging to make the U.S. the undisputed crypto capital of the planet.
