Banks in the U.S. may not like the idea of being forced to collect citizenship data on customers, but Treasury Secretary Scott Bessent says they better be prepared for the task.
“If Treasury and the banking regulators say it’s their job, it’s their job,” Bessent told CNBC’s Sara Eisen at the Invest in America Forum in Washington, D.C., on Tuesday.
An executive order that has been discussed for months took a step closer to reality earlier this week when Bessent said in an interview with Semafor that the EO is “in process.”
The planned EO is one more plank in President Donald Trump’s broader effort to tie his immigration policy to collection of information in the United States, including for voting and Census efforts.
In the U.S., citizenship documents are not necessary in order to open a bank account. Banks are required to verify identity.
The U.S., like many countries, uses “Know Your Customer” rules for bank accounts to prevent money laundering and other forms of financial crime, verifying client identities, assessing risks, and monitoring transactions to prevent fraud. Laws including the Bank Secrecy Act (BSA) and the USA PATRIOT Act also underpin efforts to verify customers. Banks collect Social Security numbers, or an Individual Taxpayer Identification Number (ITIN), names, dates of birth, and addresses, among other documents.
But that doesn’t satisfy Bessent. “Why can unknown foreign nationals come and open a bank account?” he said at the CNBC event. “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?”
Overseas, citizenship information is more often required for banking access, but there is no universal mandate. Bessent told Eisen, “Every other country does it. Every other country. … There should be stricter rules.”
Republicans have voiced support for the idea.
Sen. Tom Cotton (R-AK) introduced a bill in March to require FDIC or NCUA-insured banks and credit unions to verify that anyone opening an account is a U.S. citizen, a permanent resident, or in the country on a valid visa, with an additional verification check on legal status.
Bessent has previously said that Real IDs would not be considered legal documents under this new executive order.
Last October, Cotton wrote to the Treasury “to urge the Department of the Treasury to undertake review of current rules that allow illegal aliens to obtain financial services and access to U.S. banking system.”
In addition to legal questions, some policy experts and banks have warned about damage to the economy if people are denied access to the banking system and deposit accounts, as well as potentially big increases in administrative costs for banks.
Allowing non-citizens, including undocumented immigrants, to legally open bank accounts using documentation, such as an ITIN, means they can pay taxes and avoid being part of the “unbanked” existing in a purely cash economy. Being unbanked is often associated with less ability to move up the social ladder and contribute to economic growth.
For banks, center-right think tank American Action Forum estimated a citizenship verification requirement could add anywhere from 30 million to 70 million paperwork hours and $2.6–$5.6 billion in costs. “Verifying new accounts is the tip of the iceberg; the lack of details makes it difficult to estimate the costs of verifying existing accountholders,” it wrote in a March analysis.
Illegal immigrants “don’t have a right to be in the banking system,” Bessent told CNBC.
