The Trump administration is reportedly considering a new requirement for US banks to verify the citizenship information of current and future customers. Sources familiar with the discussions told CNN that this potential action could take the form of an executive order, aligning with the president's immigration enforcement priorities.
Industry Concerns Emerge
The prospect of this requirement has generated significant concern within the financial industry. Industry sources indicated that banks might be compelled to request new categories of documents, such as passports, to confirm citizenship status.
Bank executives reportedly worry that such an order would force them to participate in the administration's efforts to deport undocumented immigrants. Plans are not finalized, and other options and legal authorities are still under consideration.
White House Remains Non-Committal
The White House has not confirmed or denied the potential executive order or other related action. A spokesperson stated:
"Any reporting about potential policymaking that has not been officially announced by the White House is baseless speculation."
Current Practices and Implementation Challenges
Current regulations require banks to adhere to anti-money-laundering and "know-your-customer" rules, including verifying a customer's residence. However, banks do not currently collect or verify citizenship information.
If implemented, the order could mandate banks to retroactively obtain citizenship details from existing customers and collect this data from all new customers. An industry source characterized verifying every bank customer’s citizenship status as:
"unworkable."
Context: Related Enforcement Initiatives
This consideration comes amidst other immigration enforcement efforts by the Trump administration. Previously, an initiative to share taxpayer data with federal immigration authorities involved placing up to 50 senior IRS information technology professionals on administrative leave. This effort was legally challenged and subsequently blocked by a federal judge.
Broader Political and Financial Landscape
The discussions also occur as the Trump administration has sought to address concerns about the "debanking" of conservatives. Former President Trump signed an executive order last year aimed at preventing banks from restricting services based on religious or political beliefs.
More recently, Trump filed a lawsuit against JPMorgan Chase after the bank terminated his customer relationship following the January 6, 2021, insurrection. JPMorgan Chase has asserted the lawsuit lacks merit.