GoKawiilBanks in the U.S. may not like the idea of being forced to collect citizenship data on customers, but Treasury Secretary Scott Bessent says they better be prepared for the task.
"If Treasury and the banking regulators say it's their job, it's their job," Bessent told CNBC's Sara Eisen at the Invest in America Forum in Washington, D.C., on Wednesday.
An executive order that has been discussed for months took a step closer to reality earlier this week when Bessent said in an interview with Semafor that the EO is "in process."
The planned EO is one more plank in President Donald Trump's broader effort to tie his immigration policy to collection of information in the United States, including for voting and Census efforts.
In the U.S., citizenship documents are not necessary in order to open a bank account. Banks are required to verify identity.
The U.S., like many countries, uses "know your customer" rules for bank accounts to prevent money laundering and other forms of financial crime, verifying client identities, assessing risks, and monitoring transactions to prevent fraud. Laws including the Bank Secrecy Act, or BSA, and the USA Patriot Act also underpin efforts to verify customers. Banks collect Social Security numbers, or an individual taxpayer identification number, or ITIN, names, dates of birth and addresses, among other documents.
But that doesn't satisfy Bessent. "Why can unknown foreign nationals come and open a bank account?" he said at the CNBC event. "Our bank executives job is to know your customer. How do you know your customer if you don't know if they have legal or illegal status, whether they are a U.S. citizen or green card holder?"
Overseas, citizenship information is more often required for banking access, but there is no universal mandate. Bessent told Eisen: "Every other country does it. Every other country. ... There should be stricter rules."
Republicans have voiced support for the idea.
Sen. Tom Cotton, R-Ark., introduced a bill in March to require Federal Deposit Insurance Corp. or National Credit Union Administration-insured banks and credit unions to verify that anyone opening an account is a U.S. citizen, a permanent resident, or in the country on a valid visa, with an additional verification check on legal status.
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