Immigration enforcement impacts U.S. banking and lending

Increased immigration enforcement and federal scrutiny under the Trump administration are significantly altering the financial behaviors of undocumented immigrants in the United States. Reports indicate a sharp decline in banking activity among non-citizens, with many individuals closing bank accounts and returning to storing cash at home due to concerns regarding their residency status.

Consumer lending to illegal immigrants has reportedly fallen by 70 percent since 2024. Financial institutions are also becoming more cautious about originating loans to borrowers with limited or nonexistent credit histories, reassessing risks associated with customers whose legal ability to work and remain in the country may be uncertain.

Erica Serna, associate director of financial empowerment for UnidosUS, noted a broad reduction in the use of financial, education, and workforce development services. This shift follows executive actions aimed at increasing scrutiny of residency and employment status, as well as expanded deportation efforts and the cancellation of work permits.