- Key insight: The account closures coincide with a presidential executive order targeting undocumented immigrants.
- What's at stake: Financial institutions are aggressively monitoring and auditing user activity under strict new compliance mandates.
- Expert quote: "The number of accounts that are suddenly closed is going through the roof." — Jim McCarthy, chairman of consulting firm McCarthy Hatch
More than 20,000 consumers reported seeing their bank accounts closed suddenly in recent months, according to a new analysis of complaint data, which experts believe is the result of financial institutions seeking to comply with the Trump administration's restrictionist immigration policies.
Between December 2025 and May of this year, 20,682 consumers filed complaints with the Consumer Financial Protection Bureau about being locked out of their bank accounts without explanation.
In May, President Trump signed an
Bankers were pleased that the order stopped short of requiring the industry to verify the citizenship of account holders. Many bankers feared — and balked at — the possibility of having mandatory citizenship checks at teller desks.
Jim McCarthy, chairman of McCarthy Hatch, a consulting firm that analyzes CFPB complaint data, said banks have responded to the Trump administration's immigration policies by terminating accounts without explanation.
"The number of accounts that are suddenly closed is going through the roof," McCarthy said. He didn't provide comparisons with CFPB complaint data from recent years but said the account-closure trend appears to be accelerating.
"Big banks are starting to shed accounts where consumers don't understand why the account was closed, or they don't have access to their funds, or there's some mystery around the account closure," McCarthy said.
McCarthy Hatch used AI to analyze more than 609,000 consumer complaints filed between December and May, and found that roughly 3% of them detailed abrupt account closures, frozen funds and terminated relationships. The data likely captures only a small fraction of all account closures, since most affected customers probably don't file complaints.
Neither banks nor regulators track or report data on the number of closed accounts or the reasons for closure. The lack of uniform reporting requirements by financial regulators is a key reason why concrete data on debanking remains elusive. In the absence of hard data, anecdotal evidence has become more widespread.
"The big takeaway is that consumers are screaming for help in plain English: 'My account was suddenly closed,' 'The bank would not tell me why,' and 'I could not access my funds,'" McCarthy said. "When banks pull the plug on a customer's bank account, they leave consumers entirely in the dark."
During both the first and second Trump administrations, Republicans have railed against so-called debanking by financial institutions, particularly in connection with the crypto industry. That backlash included efforts to reverse Obama-era initiatives like Operation Choke Point, which critics argued pressured banks to drop clients in legal but "high-risk" industries. The Trump administration's policies have specifically targeted the "choking off" of certain business sectors, such as gun manufacturing, that have faced pressure in the financial system.
During the second Trump administration, debanking has become an even bigger rallying cry for conservatives. The GENIUS Act of 2025 requires federal agencies to ensure "reputable, law-abiding businesses" are not excluded from the banking system without a clear legal or safety-and-soundness justification. In addition, Trump has
At the same time, the Trump administration's policies on immigration appear to be accelerating the debanking of noncitizens.
Earlier this month, the Treasury Department's Financial Crimes Enforcement Network issued
In addition, Fincen and the CFPB recently issued separate advisories suggesting that immigration status may be relevant to lenders' ability-to-repay assessments and banks' customer due-diligence obligations. Since the advisories were issued, no major lender has publicly announced
ITIN numbers are issued by the Internal Revenue Service to people who are required to file a tax return but are ineligible for a Social Security number. ITIN holders are in the country legally — in some cases on student visas, in others as permanent residents. The stated goal of the Trump administration is to identify theft, payroll fraud and the use of shell companies to avoid paying taxes.
"In the current climate there is a desire by many financial institutions to overcomply and to comply early, which is consistent with what we're hearing in the marketplace," said Diane Thompson, deputy director and chief advocacy officer at the National Consumer Law Center.
Consumer advocates also are hearing that some banks are not allowing people who lack a Social Security number to open new accounts, said Thompson, a former assistant CFPB director and senior advisor.
The lockouts aren't only hitting traditional checking and savings accounts, but also involve fintech platforms, credit card issuers and peer-to-peer payment apps. Block, the company behind the popular Cash App, was the financial institution most frequently cited for closing accounts without any explanation, according to the McCarthy Hatch analysis. Block did not respond to a request for comment.
Nicholas Anthony, a policy analyst at the Cato Institute's Center for Monetary and Financial Alternatives, said that because any bank actions related to the Bank Secrecy Act are confidential, banks cannot disclose the reasons for account closures to consumers. The Bank Secrecy Act requires financial institutions to assist the government in detecting and preventing money laundering and financial crime.
"Debanking has been going on for a very long time," Anthony said. "It's very complicated, and the president's executive order does add another layer of confusion on the consumer side, because there's another reason for them to be kicked out, and they might not get answers as to why."
When consumers lose their bank accounts, they often describe feeling like criminals, because they are given no explanation, though they do typically recover their funds, Anthony said.
Prior to the Trump administration's recent actions, banks were already required to check for illegal activity and whether an account holder was working in the country illegally. The impact of the administration's May 2026 executive order will depend on how aggressive the Treasury Department is in enforcing it.
"What is clear is that consumers are talking about [debanking], and the volume of those narratives warrants continued monitoring," said McCarthy, a veteran risk and compliance officer, and a founding member of the CFPB. "The data suggests that consumers are increasingly describing account closures ... often with little or no explanation provided."
Whether the heavy volume of complaints points to hyper-aggressive automated fraud algorithms, an institutional tightening of risk appetites or shifting regulatory pressures remains an open question, McCarthy said. Financial institutions are trapped behind a wall of strict anti-money-laundering laws, fraud controls and algorithmic risk-management practices. When a system flags an account for suspicious activity, banks are barred by federal regulation from "tipping off" the consumer about an investigation.
"Anyone without a Social Security Number is being turned away, and we have some reports of people who are perceived to be immigrants being turned away by bank employees," Thompson said. "It's hard to know how widespread it is."
Trump's executive order says that people who don't have citizenship could pose safety and soundness risks or fraud risks.
In consumers' complaints' they rarely use the term "debanking." Instead, they typically describe what happened to them, such as: "My account was suddenly closed," "My account was frozen," "I could not access my funds," "The bank ended the relationship." Consumers sometimes add words to the effect of, "The bank would not tell me why."
The bureau's database can be searched for specific words such as "account closed," and "funds unavailable," which provides one way to start quantifying the depth of the issue.
"We are actively monitoring this issue because the complaint volume appears elevated relative to what we would historically expect to see," McCarthy said.
