President Trump issued an executive order directing federal regulators to reconsider know-your-customer banking rules, with a specific focus on immigration status. The administration aims to restrict undocumented immigrants' access to financial systems by making citizenship status an explicit component of money-laundering risk assessments. This regulatory shift signals a significant change in how banks evaluate customer risk profiles.

The order falls short of an earlier proposal requiring banks to collect documents like passports from all customers. The White House justified the changes by citing concerns about Chinese money-laundering networks and Mexican cartels. Regulators must now propose modifications to existing rules within 90 days, potentially creating compliance challenges for financial institutions nationwide.

Current banking rules do not mandate collection of citizenship status, and financial institutions rarely share this information with government agencies. The order gives banks new authority to obtain additional immigration data when deemed necessary. This policy could impact the banking industry's relationship with immigrant communities and alter how financial institutions serve diverse customer segments.