Banks may be asked to collect citizenship

Treasury Secretary Scott Bessent said on April 13 that an executive order requiring banks to collect customers’ citizenship information is “in process.” (semafor.com) Bessent made the remark at Semafor’s World Economy dinner at the Library of Congress in Washington, and Semafor reported that he defended the idea by asking why the government does not know “who’s in our banking system.” Bloomberg Law separately matched the report on April 14. (semafor.com) (news.bloomberglaw.com) The proposal has been under discussion since late 2025, according to Semafor, which reported on February 26 that Treasury’s Financial Crimes Enforcement Network was assigned to map out options under existing law. Semafor said officials were weighing either an executive order or regulatory guidance, with some options described as binding and others voluntary. (semafor.com) Banks already have a federal “customer identification program” for new accounts, but the rule is about proving identity, not citizenship. The current regulation requires a name, date of birth, address, and identification number before opening an account. (ecfr.gov) (fdic.gov) For a United States person, that identification number is a taxpayer identification number. For a non-United States person, the rule already allows documents such as a passport number and country of issuance, an alien identification card number, or another government document showing nationality or residence. (ecfr.gov) (fdic.gov) That means the administration is considering pushing banks past the existing anti-money-laundering rule and into checking legal status or citizenship as a separate screen. The Wall Street Journal reporting summarized by multiple outlets in February said the idea could apply to both new and existing customers. (winston.com) (thehill.com) A Senate bill introduced on March 25 shows what a statutory version could look like. Senator Tom Cotton’s S. 4206, the “Know Your American Customer Act,” would require insured banks and credit unions to verify the citizenship or legal status of people opening accounts and some existing accountholders. (congress.gov) The bill says a “lawfully present” customer would include a United States citizen or national, or a noncitizen who was admitted or paroled into the country and whose authorized stay has not expired. It was referred to the Senate Committee on Banking, Housing, and Urban Affairs after introduction. (congress.gov) Bank groups have not publicly endorsed a citizenship-check mandate, and the American Bankers Association told Congress on March 17 that banks are already subject to extensive federal privacy and data-protection rules under laws including the Gramm-Leach-Bliley Act. That leaves banks facing two live questions at once: what new data they would have to collect, and what they would be expected to do with it. (aba.com)