President Donald Trump has signed two executive orders aimed at limiting the access of non-citizens to the U.S. financial system and putting checks on money laundering.

The executive order, named “Restoring Integrity to America’s Financial System,” signed on Tuesday, requires banks to take into account a customer’s immigration status and employment authorization while evaluating potential financial risk.

The White House has pointed to Chinese money-laundering networks and Mexican cartels as the reasoning behind the overhaul of the know-your-customer rules.

The directive also tasks the Treasury Secretary and federal regulators with guiding banks to identify customers whose activity may indicate risks like money laundering, terrorism financing, and labor trafficking.

The order instructs regulators to propose rule changes within 90 days. At present, banks are not obligated to collect citizenship status specifically and do not regularly share such information with the government. There is no restriction preventing banks from opening accounts for noncitizens.

Digital Assets Get Regulatory Overhaul

The second executive order titled “Integrating financial technology innovation into regulatory frameworks” instructs U.S. regulators to incorporate digital assets and fintech into the traditional financial system by easing regulatory barriers and promoting collaboration between fintech firms, banks, and regulators.

Agencies must review existing rules within three months and propose updates that encourage innovation while preserving financial safeguards. It also considers expanding access to payment systems, including potential reforms to Federal Reserve accounts for non-bank financial firms.

Immigration Rules Shape Banking Policy

The executive orders could restrict financial access for non-citizens, especially undocumented immigrants, with the White House arguing that their access to loans and banking services raises costs that are ultimately passed on to U.S. consumers through higher fees and interest rates. This move also follows the Treasury’s efforts in February to prevent the misuse of refundable tax credit benefits by illegal aliens.

Notably, Tuesday’s executive orders are less strict than an earlier proposal that would have required banks to collect additional citizenship documents like passports from all customers, a plan the banking industry opposed over legal concerns and implementation costs.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock