Treasury Secretary Scott Bessent announced at the Invest in America Forum that the Trump administration is preparing to require banks to collect citizenship data from customers, signaling that an executive order (EO) on this issue is imminent [1]. Bessent stated that banks are expected to comply with the forthcoming mandate, which would require them to request additional documents from customers beyond current 'know your customer' (KYC) rules [1]. He emphasized, 'If Treasury and the banking regulators say it's their job, it's their job,' underscoring the administration's intent to enforce stricter verification standards [1].
Currently, U.S. banks are required to verify identity using KYC rules, collecting information such as Social Security numbers, ITINs, names, dates of birth, and addresses, but not citizenship status [1]. Bessent criticized this approach, questioning, 'Why can unknown foreign nationals come and open a bank account?' and argued that knowing a customer's citizenship or legal status should be part of the KYC process [1]. He also noted that while overseas banks more frequently require citizenship information, there is no universal mandate, but he believes the U.S. should adopt stricter rules [1].
Republican lawmakers have expressed support for this initiative. In March, Senator Tom Cotton introduced a bill to require FDIC- or NCUA-insured banks and credit unions to verify that account holders are U.S. citizens, permanent residents, or valid visa holders, with an additional check on legal status [1]. Bessent has previously clarified that Real IDs would not be considered sufficient legal documents under the proposed executive order [1].
The banking industry has pushed back against the plan, but the administration is moving forward as part of a broader effort to link immigration policy with data collection for voting and Census purposes [1]. No specific market reactions or analyst opinions were mentioned in the article [1].
CONCLUSION
The Trump administration is advancing plans to require banks to collect citizenship data, with an executive order expected soon. While the move has support from some lawmakers, it faces resistance from the banking sector and could significantly alter current KYC practices. Market implications remain uncertain as the industry awaits further details.