The number of non-citizens engaged in the U.S. banking system has fallen sharply amid the Trump administration’s crackdown on illegal migrants.
Immigrants have been closing bank accounts and going back to keep cash in their homes, according to a report by Bloomberg.
Migrants are also taking out fewer loans, the news organization added. Consumer loans to illegal aliens fell by 70 percent since 2024. And lenders are beginning to shy away from entering into such deals to begin with.
“We’ve seen a reduction overall in people who come for financial services, education services, workforce development,” said Hispanic rights activist Erica Serna, the associate director of financial empowerment for UnidosUS. She added that the current atmosphere is “truly frightening for families.”
Serna’s sentiment was echoed by the Biden administration when, in 2023, Biden’s federal regime began threatening banks with costly federal investigations if they did not grant risky loans to illegal migrants.
At the time, Biden warned the banking industry that “denying someone access to credit based solely on their actual or perceived immigrant status may violate federal law.”
But the lenient banking schemes are frowned upon by the Trump administration. Indeed, Trump signed an executive order in May directing federal authorities to make sure financial institutions pay closer attention to the residency status of potential and current clients.
With more than a million deported since Trump came back to Washington and work permits being cancelled all across the country, banks are finding the atmosphere far less clear for dealings with illegal aliens.
With the executive order, the Independent Community Bankers of America (ICBA) has balked at the new requirements and told members to “avoid information collection requirements that impose substantial burdens on community banks, undermine their ability to meet the needs of local communities, and drive American citizens out of the regulated banking system.”
Despite the ICBA’s pushback, the Treasury Department’s Financial Crimes Enforcement Network has warned banks to make sure that clients are depositing money earned legally with legal work permits.
Consequently, loans issued to those without suitable credit scores over the last few months have cratered.
“Across all asset classes, the share of loans to people without credit scores fell more than 70% from 2024 to 2025 and another 40% in 2026,” Bloomberg reported. The site further added that lending for auto loans and credit cards for those with low or non-existent credit scores is “expected to be about $7.2 billion in 2026, down from about $37 billion in 2024.”
While these metrics are not a perfect match for the population of illegal migrants, it is a fairly good indicator, Bloomberg says.
“It is the segment with the largest concentration of undocumented borrowers,” said Vadim Verkhoglyad, head of research at dv01, who wrote in the report cited by Bloomberg. “The timing suggests lenders may be reducing exposure to these borrowers amid changes to the political and policy environment.”
Another migrant activist, immigration lawyer Jennifer Oltarsh, said her clients are more fearful than ever.
“My clients are afraid, so they’re pulling their money out of banks,” she said. “They’re holding it in their mattresses.”
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