Trump Takes a Sledgehammer to Banking Loopholes for Illegal Aliens

The illegal immigration issue seems to grow new facets every time we turn around. A lot of the problem is, as we've often discussed, incentives; people take risks to enter the country illegally and remain in the country illegally because there are incentives for them to do so. Some of those incentives are financial, including the ability to obtain loans and even mortgages. There are also gaps in our banking systems that allow them to be exploited to move money gained through illegal means.

On Tuesday, President Trump signed an executive order (EO) intended to close some of those gaps in our financial system and to put a halt to that particular incentive.

The EO is titled Restoring Integrity to America's Financial System. That EO reads in part:

America’s financial institutions serve a critical role in safeguarding the American people against financial fraud and abuse.  My Administration has taken significant steps to lower the costs of providing financial services for Americans and reduce unnecessary and burdensome Federal regulations that restrain economic growth and hamper the competitiveness of financial service providers nationwide.  However, it has long been the policy of the United States to adopt tailored measures to safeguard our financial system from illicit use and promote safe and sound lending and other practices by financial institutions.  My Administration will not tolerate national security and public safety risks caused by illicit cross-border financial activity, nor will it permit risks to our financial system posed by the extension of credit or financial services to the inadmissible and removable alien population.

It stands to reason that illegal aliens shouldn't be able to access such financial systems as banking services, loans for vehicles and housing, and so forth. At present, it's legal for illegal aliens to seek loans for automobiles and even home mortgages, which speaks to those incentives mentioned above. Cracking down on this practice should help reduce those incentives.

People illegally in the country shouldn't be accessing the limited amount of capital that is available for home and auto loans. 

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The White House also issued a fact sheet with more details.

• The Order directs the Secretary of the Treasury to issue a formal advisory to financial institutions identifying red flags and suspicious activity patterns tied to payroll tax evasion, concealment of true account ownership, off-the-books wage payments and structuring schemes, labor trafficking, and the use of individual taxpayer identification numbers to open accounts or obtain credit without verified legal presence.
• 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.
• 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.
• The Order directs the Consumer Financial Protection Bureau to consider modifying regulations to clarify that potential deportation and loss of wages are factors that could affect a borrower’s ability to repay a loan under “ability-to-repay” standards.
• The Order directs Federal financial regulators to issue guidance on managing the credit risks of extending loans and financial services to illegal aliens without work authorization.

Again, Congress will have to act to codify a lot of these things for the long-term, as the one real problem with EOs of this type is that the next Democrat to sit in the Oval Office can, with the stroke of a pen (or an autopen), repeal them. And the legality of extending loans to illegal aliens seems something that will require a legislative fix to close permanently.

A lot of this is aimed at money-laundering operations, as well, most especially the expanded requirements and options for banks and financial institutions to verify customer identities. That will make life marginally harder for foreign interests ranging from Chinese Communist Party operatives to drug cartel members to move money about, in, or out of the United States.

Now, though, the ball is in Congress's court. What say you, Speaker Johnson?

Editor’s Note: Thanks to President Trump, illegal immigration into our great country has virtually stopped. Despite the radical left's lies, new legislation wasn't needed to secure our border, just a new president.

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