Overview
- Treasury Secretary Scott Bessent said an executive order is being prepared that would require banks to collect each customer’s citizenship or legal status.
- Under the proposal, banks would verify whether a client is a U.S. citizen, a permanent resident, or holds a valid visa, and reporting indicates the checks could extend to existing accounts.
- Officials frame the change as a tougher form of know-your-customer compliance, which today verifies identity to fight money laundering but does not prove immigration status.
- Bank groups and analysts warn of heavy new burdens, with American Action Forum estimating 30 to 70 million extra hours of paperwork and $2.6 to $5.6 billion in costs.
- Critics say the shift could shut out undocumented customers who use IRS-issued ITINs, push more people into cash, and complicate tax payments, while a parallel bill from Sen. Tom Cotton and closer links to ICE signal a broader policy push even as timing and scope remain unsettled.