The Trump administration is considering a new policy that could require U.S. banks to verify the citizenship status of both existing and potential customers, as part of the president’s broader immigration enforcement measures, sources revealed to CNN. This proposed move, which could be implemented through an executive order, has raised alarm within the banking industry. The worry is that banks might be forced to request documents never before required in customer verification, such as passports or other forms of proof of citizenship.
While the details remain unclear, and no final decisions have been made, industry insiders are concerned that such a requirement would involve an unprecedented level of scrutiny. One source noted that banks could be tasked with not only collecting citizenship information from new customers but also retroactively obtaining it from their existing client base. “It’s a bad idea. We are very alarmed,” a financial industry source told CNN.
The financial sector is particularly wary of being pulled into the administration’s immigration enforcement agenda, with some fearing that the policy could compel banks to play a role in tracking down and deporting undocumented immigrants.
The White House has not confirmed or denied the reports, with spokesperson Kush Desai stating, “Any reporting about potential policymaking that has not been officially announced by the White House is baseless speculation.”
Currently, banks are required to comply with anti-money laundering laws and “know-your-customer” (KYC) regulations, which necessitate verifying customers’ identities and addresses. However, verifying citizenship status is not part of their existing requirements. Implementing such a policy would be logistically challenging, with one industry source calling it “unworkable.”
In parallel to this, the Trump administration has also pursued efforts to crack down on what it sees as politically motivated “debanking,” which includes targeting banks that limit services to customers based on their political or religious beliefs. Last year, Trump signed an executive order aimed at penalizing financial institutions that refuse services to certain customers on these grounds.
Trump has also been involved in a legal battle with JPMorgan Chase after the bank ended its relationship with him following the January 6, 2021, Capitol insurrection. JPMorgan maintains that the lawsuit has no merit.
These discussions come amid other moves by the administration to use government agencies, like the IRS, for immigration enforcement purposes, which have faced legal challenges and resulted in internal staff conflicts. However, plans for the use of taxpayer data by immigration authorities were blocked by a federal judge late last year.