The Trump administration is reportedly exploring the possibility of requiring banks to obtain proof of citizenship from their customers, according to sources familiar with the discussions. This proposal, if implemented, would apply retroactively, necessitating that banks seek documentation not only from new customers but also from existing ones. Notably, REAL IDs, which do not verify citizenship, would not be accepted as valid proof.
A White House spokesperson, Kush Desai, dismissed the reports as “baseless speculation,” emphasizing that no official announcement regarding such a policy has been made. The stance of the Treasury Department on this proposal remains unclear as they did not provide any comments.
The banking industry has expressed significant concerns regarding the feasibility of implementing such a requirement, citing the potential for increased costs and logistical challenges. Current laws on illicit finance mandate that financial institutions gather certain personal information from their clients, but these laws do not explicitly require proof of citizenship.
One financial services lobbyist described the proposal as a “complete nightmare” in terms of logistics, warning that it could elicit backlash from conservative voters. “The administration may view this as a favorable idea until those in the field face the reality of asking average Americans for proof of citizenship,” they noted. Another insider echoed concerns about the practicality of verifying citizenship for every bank customer, pointing out that obtaining such documentation could be problematic for many Americans. Historically, the U.S. government has worked for two decades to promote the adoption of the REAL ID, yet this does not serve as a proof of citizenship.
These discussions bear resemblance to last year’s concerns raised by financial firms when congressional Republicans considered taxing cash remittances sent by non-citizens to families in their home countries. That initiative also hinged on requiring banks to collect citizenship proof, illustrating ongoing tensions surrounding financial regulations in relation to immigration status.
As the conversation progresses, it remains to be seen how this proposal will unfold and whether it will gain traction amidst the mounting resistance from the banking sector. The implications of such a policy could significantly affect millions of Americans and reshape the banking landscape.