As banks close accounts, experts point to immigration crackdown | American Banker

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As banks close accounts, experts point to immigration crackdown<br>By Kate Berry CloseText

About Kate<br>twitter<br>kateberry1<br>mailto<br>kate.berry@arizent.com<br>linkedin<br>kate-berry-aa69353

Published June 24, 2026, 12:41 p.m. EDT<br>Updated June 24, 2026, 1:14 p.m. EDT

7 Min Read

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Processing Content<br>Key insight: The account closures coincide with a presidential executive order targeting undocumented immigrants.<br>What's at stake: Financial institutions are aggressively monitoring and auditing user activity under strict new compliance mandates.<br>Expert quote: "The number of accounts that are suddenly closed is going through the roof." — Jim McCarthy, chairman of consulting firm McCarthy Hatch<br>More than 20,000 consumers reported seeing their bank accounts closed suddenly in recent months, according to a new analysis of complaint data, which experts believe is the result of financial institutions seeking to comply with the Trump administration's restrictionist immigration policies.

Between December 2025 and May of this year, 20,682 consumers filed complaints with the Consumer Financial Protection Bureau about being locked out of their bank accounts without explanation.<br>In May, President Trump signed an executive order directing federal regulatory agencies to issue guidance to banks on identifying informal work arrangements that undocumented workers may rely upon.<br>Bankers were pleased that the order stopped short of requiring the industry to verify the citizenship of account holders. Many bankers feared — and balked at — the possibility of having mandatory citizenship checks at teller desks.<br>Jim McCarthy, chairman of McCarthy Hatch, a consulting firm that analyzes CFPB complaint data, said banks have responded to the Trump administration's immigration policies by terminating accounts without explanation.

"The number of accounts that are suddenly closed is going through the roof," McCarthy said. He didn't provide comparisons with CFPB complaint data from recent years but said the account-closure trend appears to be accelerating.<br>"Big banks are starting to shed accounts where consumers don't understand why the account was closed, or they don't have access to their funds, or there's some mystery around the account closure," McCarthy said.<br>McCarthy Hatch used AI to analyze more than 609,000 consumer complaints filed between December and May, and found that roughly 3% of them detailed abrupt account closures, frozen funds and terminated relationships. The data likely captures only a small fraction of all account closures, since most affected customers probably don't file complaints.<br>Neither banks nor regulators track or report data on the number of closed accounts or the reasons for closure. The lack of uniform reporting requirements by financial regulators is a key reason why concrete data on debanking remains elusive. In the absence of hard data, anecdotal evidence has become more widespread.<br>"The big takeaway is that consumers are screaming for help in plain English: 'My account was suddenly closed,' 'The bank would not tell me why,' and 'I could not access my funds,'" McCarthy said. "When banks pull the plug on a customer's bank account, they leave consumers entirely in the dark."<br>During both the first and second Trump administrations, Republicans have railed against so-called debanking by financial institutions, particularly in connection with the crypto industry. That backlash included efforts to reverse Obama-era initiatives like Operation Choke Point, which critics argued pressured banks to drop clients in legal but "high-risk" industries. The Trump administration's policies have specifically targeted the "choking off" of certain business sectors, such as gun manufacturing, that have faced pressure in the financial system.<br>During the second Trump administration, debanking has become an even bigger rallying cry for conservatives. The GENIUS Act of 2025 requires federal agencies to ensure "reputable, law-abiding businesses" are not excluded from the banking system without a clear legal or safety-and-soundness justification. In addition, Trump has sued JPMorganChase and Capital One Financial for closing his own accounts in the wake of the Jan. 6, 2021, attacks on the U.S. Capitol, though a judge dismissed the latter suit in March.<br>At the same time, the Trump administration's policies on immigration appear to be accelerating the debanking of noncitizens.<br>Earlier this month, the Treasury Department's Financial Crimes Enforcement Network issued guidance jointly with prudential regulators, encouraging banks to scrutinize potentially unauthorized employment by people who have individual...