Under the order, the Treasury Department and banking regulators are instructed to develop guidance that helps financial institutions identify customers and transactions that may present risks related to money laundering, terrorism financing, labor trafficking, and other forms of financial crime. The administration argues that stronger customer verification procedures are necessary to prevent criminal organizations from exploiting the American financial system.
The order outlines several indicators that banks should monitor when evaluating suspicious activity. These include repeated large cash withdrawals, the use of shell companies to conceal ownership, and payment systems that may facilitate unreported wages. It also notes that the use of an Individual Taxpayer Identification Number (ITIN) instead of a Social Security number could be considered a risk indicator in certain circumstances. ITINs are issued by the Internal Revenue Service to individuals who are not eligible for Social Security numbers but are required to file and pay taxes in the United States.
Supporters of the measure say it will improve financial security, strengthen compliance efforts, and reduce opportunities for criminal networks to move illicit funds. Critics, however, argue that the policy could make banking services more difficult to access for immigrants, particularly those without permanent legal status.
The White House stated that the initiative is intended to protect the integrity of the financial system and reduce risks associated with inadequate customer identification practices. In addition, the order directs federal regulators to examine possible changes that would allow banks to collect more information regarding customers’ immigration and employment authorization status, further expanding oversight requirements within the financial sector.
