GOP Divide Emerges Over Trump Immigration Banking Order
By CU Today Staff —
WASHINGTON--A split among Republicans over President Trump’s recent executive order directing regulators to increase immigration-related scrutiny of bank customers surfaced Thursday during a House Financial Services Committee hearing, where lawmakers questioned banking regulators about the potential impact on financial institutions and consumers, Law360 reported.
The debate centers on a May 19 executive order that directs the Treasury Department and federal regulators to identify suspicious activity tied to illegal immigration, consider tougher customer due diligence requirements and evaluate changes to Bank Secrecy Act and customer identification rules. The order also calls for guidance on managing the credit risks associated with lending to individuals without work authorization.
During Thursday’s HFSC hearing, a Republican lawmaker raised concerns that the initiative could create significant compliance burdens for banks and potentially limit access to financial services. But Comptroller of the Currency Jonathan Gould pushed back, describing those concerns as “overblown” and arguing the order is aimed at improving risk management and combating illicit financial activity rather than requiring banks to broadly collect citizenship information from customers, Law360 said.
The issue has drawn intense attention from the banking industry since reports first surfaced that the administration was considering requiring banks to collect customers’ citizenship or immigration-status information. Bank trade groups and executives warned such a requirement could cost billions of dollars, force major technology and compliance changes, and potentially leave millions of people outside the traditional banking system. The final executive order stopped short of mandating citizenship-data collection but still directs regulators to develop enhanced scrutiny standards and identify immigration-related red flags for financial institutions.
Originally reported by CU Today.