US Treasury tightens bank scrutiny, targets loans to undocumented immigrants

The U.S. Treasury Department is intensifying its oversight of banks, focusing on loans extended to individuals without legal authorization to work in the country. This initiative is part of a broader effort to prevent fraud and mitigate risks within the financial system.

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This administration will not tolerate the flagrant abuse of our financial system, nor will it permit the risks that come with extending financial services to foreigners in irregular situations.

New directives from the Office of the Comptroller of the Currency (OCC) advise financial institutions to rigorously identify, assess, monitor, and control credit risks associated with undocumented individuals. Treasury Secretary Scott Bessent stated that the administration will not tolerate the misuse of the financial system or the risks posed by providing financial services to those in irregular status. He highlighted Arizona's particular vulnerability to the repercussions of past migration crises.

Bessent urged bankers to collaborate with the government, emphasizing that the White House relies on financial institutions to detect and report suspicious patterns before they escalate into financial crimes. He referenced guidelines from the Financial Crimes Enforcement Network (FinCEN) designed to help institutions identify schemes involving illegal employment, shell companies, payroll tax evasion, identity theft, and other forms of financial exploitation.

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Here in Arizona, your vigilance is especially vital.

"We are applying the same determination with which we secure the border to protect our financial system," Bessent declared. This initiative aligns with an executive order signed by President Donald Trump in May, which directs the Treasury Department and federal banking regulators to enhance supervision of financial activities linked to unauthorized employment. The administration views this as a critical step in safeguarding the integrity of U.S. financial institutions.

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We are applying the same determination with which we secure the border to protect our financial system.