Trump Executive Order Expands Bank Secrecy Act
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Just two days before Congress is set to hold a hearing on the modernization of the Bank Secrecy Act (BSA), President Trump signed an Executive Order (EO) titled "Restoring Integrity To America's Financial System" to "strengthen customer identification requirements for financial institutions" and "address the credit risks" allegedly posed by illegal immigrants.<br>The EO follows statements by Treasury Secretary Scott Bessent that banks should carefully review any accounts held by immigrants earlier this year, urging the government to pass citizenship checks for financial institutions.<br>The EO stands in stark contrast to Trump's August EO meant to guarantee fair banking for all Americans.<br>Bessent Pressures Banks to Review Immigrant Accounts<br>In Congressional hearings last week, the Treasury Secretary doubled down on the use of financial warfare to achieve political ends.<br>The RageL0la L33tz
Expanding the Bank Secrecy Act<br>While Donald Trump fights against the very financial institutions that used the BSA to debank him and his family following his first presidential term, he has now decided to expand the law, rather than reign it in. As the fact sheet accompanying the EO states:<br>"The Order directs the Secretary of the Treasury, in consultation with Federal financial regulators, to propose changes to Bank Secrecy Act regulations to strengthen customer due diligence requirements and the authority to obtain additional information when warranted, ensuring institutions can identify the true owners of accounts when necessary to assess risks related to unlawful activity," and:<br>"The Order directs the Secretary of the Treasury and Federal financial regulators to consider changes to the Bank Secrecy Act to strengthen customer identification program requirements , including accounting for the risks that foreign consular identification cards pose to the U.S. financial system."<br>The fact sheet claims that "gaps in customer identification practices have allowed terrorists, drug traffickers, money launderers, and other criminal networks to exploit U.S. financial institutions to move illicit funds and evade law enforcement," but it is questionable whether it is truly a lack of information that leads to the US financial system being exploited by criminal actors.<br>As Cato Institute has found, out of 28.7 million reports filed under the BSA with the Financial Crimes Enforcement Network (FinCEN) in 2025, only 275 resulted in opened investigations. The problem does not appear to be the breadth of the collected information – but rather the usefulness of the information overall.<br>On Thursday, Cato Institute's Nick Anthony will be testifying before Congress to address the inefficiency of the BSA in context of Congress' plans for a potential modernization of the law.<br>Treasury Working on BSA Reform, FinCEN Director Says<br>While she has no idea how many BSA reports have led to arrests, reevaluating the BSA to improve efficiency is a “key objective for this administration”.<br>The RageL0la L33tz
Targeting Naturalized Citizens and Green Card Holders<br>The EO additionally aims to "restore banking integrity" by "ending the extension of credit to high-risk borrowers that American citizens are forced to subsidize." This activity includes "extending mortgages, credit cards, and auto loans to illegal aliens who face potential removal or loss of wages creates structural credit risks that threaten the safety and soundness of the national banking system."<br>The problem: it is not only "illegal aliens" which face "potential removal" or "loss of wages" anymore. Under recent orders from the Trump administration, the list also includes green card holders with unfavorable political beliefs, as well as naturalized citizens. Under newest guidance, the Office of Immigration Litigation has been asked to provide the administration with 100-200 denaturalization cases per month for potential removal, leaving banks to evaluate whether to grant services to legal immigrants or naturalized citizens under Trump's BSA EO.<br>The EO further claims that "when banks are forced to absorb these elevated credit risks, the costs are passed on to American consumers in the form of higher fees and interest rates – restoring sound underwriting standards puts money back in the pockets of law-abiding Americans."<br>This, however, is only half of the truth.<br>Rep. Lynch is Wrong on the Bank Secrecy Act<br>The Massachusetts Congressman claims the BSA is “highly useful” to combat terrorism. The data says otherwise.<br>The RageNicholas Anthony
Increasing The Cost of Banking for All Americans<br>Most recent estimates place financial crime compliance costs for financial institutions in the US at $59 billion per year. This cost, in...