The Trump administration is considering a sweeping new measure that would require banks across the United States to collect and verify the citizenship status of their customers, marking a significant escalation in the president’s ongoing immigration enforcement efforts.
According to multiple sources familiar with the discussions, the potential action, which could take the form of a presidential executive order, would task financial institutions with gathering an unprecedented category of personal documents from both new and existing account holders, including passports and other official papers that confirm citizenship.
The proposal, first reported by The Wall Street Journal, has sparked immediate concern within the financial industry, with executives warning of a costly and complex compliance burden that could fundamentally alter the relationship between banks and their customers.
A New Front in Immigration Enforcement
The reported plan represents a novel approach in the administration’s campaign to reduce undocumented immigration. If implemented, banks would be compelled to play a direct role in identifying individuals who may be in the country illegally. Currently, while financial institutions are bound by “know your customer” rules designed to prevent money laundering and other financial crimes, they are not required to collect or verify a customer’s citizenship status. There are no federal laws that prohibit non-citizens from opening bank accounts in the United States.
One financial industry source, speaking to CNN, expressed deep alarm at the prospect. “It’s a bad idea. We are very alarmed,” the source said, adding that bankers fear the order is designed to force them into the administration’s broader pursuit of deportation.
The potential order would not only apply to new customers but could also require banks to retroactively obtain citizenship information from their entire existing customer base—a logistical and financial challenge of immense proportions. One industry source described the prospect of verifying every customer’s status as “unworkable”. The potential for such a mandate has already caused unease in financial markets, with the Dow Jones US Banks Index seeing a slight downturn following the news.
Legal and Logistical Hurdles
Discussions are reportedly underway within the Treasury Department about how such a policy could be implemented. One idea being considered is leveraging the Financial Crimes Enforcement Network (FinCEN), the Treasury bureau that already collects data from banks on large transactions to combat money laundering and terror financing. However, extending this framework to include citizenship verification would represent a massive expansion of FinCEN’s role.
The administration’s consideration of this measure follows other recent actions intertwining financial policy with immigration enforcement. In January, the Consumer Financial Protection Bureau and the Justice Department reversed a Biden-era policy, clarifying that lenders are allowed to consider a potential borrower’s immigration status when reviewing loan applications. The move was framed by administration officials as a correction to overreach by the previous administration. “We are correcting the last administration’s attempt to ignore these well-accepted and common-sense principles of our nation’s fair lending laws,” acting CFPB Director Russell Vought said in a statement at the time.
Furthermore, the administration has previously taken steps to share sensitive data for immigration purposes. As CNN has reported, a plan to share Internal Revenue Service taxpayer data with immigration authorities was legally challenged and blocked by a federal judge late last year.
White House Response and Industry Concerns
The White House has remained non-committal about the specific proposal, neither confirming nor denying the plans for an executive order. “Any reporting about potential policymaking that has not been officially announced by the White House is baseless speculation,” White House spokesperson Kush Desai said in a statement. Officials have stressed that plans are not finalized and that various options and legal authorities are still under consideration.
Despite the White House’s cautious response, the discussions have sent a ripple of anxiety through the banking sector. Major banks and their lobbying groups have largely declined to comment publicly, but sources indicate that the potential mandate is seen as an overreach that would place them in the middle of a highly politicized issue.
The proposal also arrives amid ongoing tensions between the Trump administration and major financial institutions. President Trump has previously signed an executive order aimed at punishing banks for what he views as the “debanking” of conservatives based on their political or religious beliefs. He has also personally filed a lawsuit against JPMorgan Chase over the bank’s decision to close his accounts following the January 6, 2021, Capitol riot.
As the administration continues to explore new avenues for its immigration crackdown, the potential banking order represents one of its most ambitious and controversial ideas yet, raising fundamental questions about privacy, the role of financial institutions in law enforcement, and the future of banking for millions of people in the U.S.
