Banks will have to collect citizenship data, Trump administration says

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The seal of the on the US Treasury Department building (Photo by SAUL LOEB/AFP via Getty Images)

The Trump administration is reportedly preparing an executive order that would require banks to collect citizenship data for new and existing customers.

According to The Wall Street Journal and CNBC, the order is in the works and would come from the Treasury Department. Here’s what we know: 

Will banks collect citizenship data? 

What they're saying:

"Why can unknown foreign nationals come and open a bank account?" Treasury Secretary Scott Bessent told CNBC at an event in Washington, D.C., Tuesday. "Our bank executives’ job is to know your customer. How do you know your customer if you don’t know if they have legal or illegal status, whether they are a U.S. citizen or green card holder?"

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"If Treasury and the banking regulators say it’s their job, it’s their job," Bessent added.

Bessent said undocumented immigrants "don’t have a right to be in the banking system."

Heated exchange between Secretary Bessent and Rep Meeks

Treasury Secretary Bessent testified on U.S. financial stability. During the hearing there was a heated exchange between Rep. Meeks (D-NY) and Treasury Sec. Bessent. 

The other side:

According to an analysis from the American Action Forum, a center-right think tank, a citizenship verification requirement for banks would add a collective 33.1-73.3 million hours of paperwork and cost banks between $2.6 billion and $5.6 billion. 

"Verifying new accounts is the tip of the iceberg; the lack of details makes it difficult to estimate the costs of verifying existing accountholders, but even under the most conservative of assumptions it would add millions of hours and billions of dollars in administrative costs," researchers wrote. 

Advocates also point out that bank accounts for non-citizens allow them to pay taxes and avoid the "unbanked" economy that often hinders their ability to contribute to the economy, according to CNBC. 

The proposal has reportedly sparked concern in the banking industry, with some questioning whether it’s legal, The Journal reports. FOX Local reached out to the American Bankers Association for comment. 

Big picture view:

The executive order would bolster President Donald Trump’s aggressive immigration enforcement agenda, which includes efforts to add citizenship questions to voter registration and the U.S. Census. 

Can non-citizens open bank accounts? 

Dig deeper:

In the U.S., banks are required to verify your identity, but they’re not required to verify your citizenship status. The U.S. banking industry follows "Know Your Customer" regulations, which collect Social Security numbers, an Individual Taxpayer Identification Number (ITIN), names, dates of birth and addresses, among other documents. Banks also have to assess risks and monitor transactions that may appear fraudulent.