WASHINGTON — The U.S. Treasury Department’s financial crimes unit is urging banks to help crack down on illegal immigration by watching for suspicious payroll schemes involving people living in the country without legal permission.
On Friday, the Financial Crimes Enforcement Network (FinCEN) released an advisory telling banks to look out for signs of identity theft, payroll tax fraud, and money laundering connected to hiring unauthorized workers. The move is part of the Trump administration’s broader effort to tighten immigration enforcement.
The advisory follows a May executive order signed by President Donald Trump. The order directs banks and regulators to pay closer attention to customers’ citizenship status when opening accounts, applying for loans, or getting credit cards. However, the final version was less strict than many expected. Earlier reports suggested the White House might require banks to collect citizenship information from all customers, but the final order provides guidance instead of a strict mandate.
Aiming to Limit Access to the Financial System
Treasury officials say the goal is to make it harder for people in the U.S. illegally to use the country’s banking system without encouraging widespread “debanking” of large groups of people.
Treasury Secretary Scott Bessent said in a statement that the administration “will not allow illegal aliens to abuse financial institutions to steal billions of dollars from hardworking American taxpayers.”
“Schemes to pay unlawful workers often rely upon access to the U.S. financial system, including U.S. banks,” Bessent added.
Banks Push Back
Banks have never routinely collected information about customers’ immigration or citizenship status, so there is little reliable data on how much risk these customers pose to the financial system.
For months, the banking industry lobbied hard against a more aggressive executive order. They argued that forcing banks to gather citizenship data on every customer would be costly and create huge amounts of extra paperwork. By issuing guidance rather than a firm requirement, the Trump administration appears to have met banks partway.
The new FinCEN advisory lists more than a dozen “red flags” that could suggest a customer is in the country illegally. Banks are encouraged to watch for these warning signs as part of their normal efforts to prevent fraud and money laundering.
This latest step fits into the administration’s ongoing push to reduce illegal immigration by limiting unauthorized workers’ ability to participate in the formal U.S. economy.
The article was reported by the Associated Press, with additional reporting from New York.
