U.S. banks may soon be asked to collect customers’ citizenship status

Treasury signals a push; an executive order is “in process”

Treasury Secretary Scott Bessent told CNBC that banks should be ready to collect citizenship information if regulators decide it’s their job. “If Treasury and the banking regulators say it's their job, it's their job,” he said — blunt and unsparing. It has been reported that an executive order to require such data collection is “in process,” a move that would extend President Trump’s broader push to weave immigration checks into domestic systems from voting rolls to the Census.

A big change to “know your customer”

Today, banks verify identity — names, Social Security numbers or ITINs, dates of birth and addresses — under KYC rules, the Bank Secrecy Act and the USA PATRIOT Act. Citizenship hasn’t been required to open an account. Bessent asked a sharp question at a CNBC event: “Why can unknown foreign nationals come and open a bank account?” He argued banks must know whether customers are citizens, permanent residents or in the country legally. Abroad, some countries already demand citizenship to open accounts; Bessent said, “Every other country does it. Every other country.”

Costs, consequences and politics

Republicans including Sen. Tom Cotton back the idea; Cotton introduced legislation to force banks to verify legal status. But experts and banks warn of real costs — not just dollars. Center-right analysts at the American Action Forum estimate billions in compliance expenses and tens of millions of paperwork hours. Critics say forcing out undocumented immigrants from the banking system could push people into cash economies, make tax collection harder, and exacerbate social exclusion. It’s about more than forms: it’s about livelihoods. Will regulators force banks into a politically fraught enforcement role? Expect legal fights and operational headaches if the White House pulls the trigger.

Sources: cnbc.com, Hacker News