US Treasury bank guidance expands data sharing tied to immigration enforcement checks

The US Treasury Department moved on Friday to draw banks deeper into President Donald Trumps immigration crackdown. New guidance lets banks share details about suspicious customers faster. A separate advisory also urges banks to watch for signs of customers who may lack legal immigration status. Officials described the shift as linked to crime and fraud checks.

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The steps followed an executive order Trump signed in May. It told banks and regulators to pay closer attention to customer citizenship. It also urged agencies to look for signs that people without legal status were opening accounts. The order did not directly require banks to collect citizenship data. Banks had lobbied against that idea for months.

Treasury Department guidance and immigration crackdown on banks

At a banking conference in Houston, Treasury Secretary Scott Bessent said the effort supported several enforcement goals. "The information in your purview can help stop a cartel financier, disrupt a money laundering network, uncover labour exploitation, or protect taxpayers from fraud,\" Bessent said in prepared remarks. The administration framed the move as targeting criminal activity.

Bessent also argued that the advisory stayed within banks’ usual duties. \"The advisory does not ask banks to become immigration officers,\" Bessent said. \"It asks banks to do what they do best: know their customers, identify risk, recognize suspicious patterns, and report illicit activity when they see it.\" Treasury officials said the goal was participation without a direct banking ban.

Patriot Act information sharing and immigration crackdown on banks

Banks already shared customer information under a Patriot Act system. That programme applied when banks suspected money laundering or fraud. It emerged after the 9/11 attacks to help fight terrorism and other crimes. Friday’s changes expanded the system in two ways. Banks may now share information in real time. Banks also gained more reasons to share it.

The updated reasons included signals often linked to immigration status. One example was an individual taxpayer identification number, or ITIN. These numbers were used more by undocumented immigrants seeking work. Treasury officials said such patterns could help identify risk. Critics said this connected immigration checks to routine banking compliance. The change widened how banks judged suspicious behaviour.

Suspicious Activity Reports and immigration crackdown on banks

Banks have been cautious about passing customer details to the federal government for immigration enforcement. Banks typically did not collect citizenship information from customers. Any new collection process would require major systems work and more paperwork. Banks also already file millions of Suspicious Activity Reports under the Bank Secrecy Act. Regulators review these reports for financial crime signals.

Last week, the Treasury Department expanded reasons for banks to file a SAR. The new reasons included possible undocumented workers. Nicholas Anthony of the libertarian-leaning Cato Institute said the administration was pressing boundaries. \"The administration is saying they dont want banks to be immigration officials, but they are trying to get as close to the line as possible,\" Anthony said.

Immigration advocates had warned about broader effects on access to banking. Any directive to gather citizenship data could lead undocumented immigrants to leave the financial system. That shift could raise the number of people without bank accounts. The White House also took other steps to discourage financial system use. In November, Treasury said some refundable tax credits would be treated as federal public benefits.

That tax credit change could bar some immigrant taxpayers from receiving payments. Treasury said the restriction applied even when taxpayers filed returns and paid taxes. Together, the newer banking guidance and earlier tax moves showed a wider push. The administration sought to limit undocumented workers’ links to formal finance. Treasury officials maintained the measures relied on bank risk checks rather than direct immigration enforcement.

With inputs from PTI