Trump backs down from requiring banks to collect citizenship information

Key Points:

• President Donald Trump will sign two executive orders aimed at protecting the US financial system from risks related to undocumented immigrants and expanding fintech firms' access to Federal Reserve payment systems.
• The first order, softened from earlier proposals, directs Treasury Secretary Scott Bessent to advise financial institutions on how undocumented immigrants might open accounts or obtain loans, avoiding mandatory proof of citizenship requirements.
• The order also calls for changes to Bank Secrecy Act regulations to enhance customer due diligence and identification programs, empowering financial institutions to seek additional information when necessary.
• Trump will urge the Consumer Financial Protection Bureau (CFPB) to consider deportation and wage-loss factors in assessing customers' loan repayment abilities and to issue guidance on managing credit risks linked to undocumented immigrants.
• The CFPB has already moved quickly, submitting a proposed rule titled “statement on ability to repay and immigration status” for review, signaling prompt implementation of its new responsibilities under the executive order.