Trump considers executive order requiring banks to collect citizenship data

In late February 2026, the Trump administration was actively discussing requiring banks to collect citizenship information from customers, according to reporting from the Wall Street Journal, Bloomberg, CNN, and the Financial Times. The discussions were described as preliminary, with the administration weighing whether to pursue the requirement through an executive order, a regulatory action, or another legal mechanism. No final decision had been made as of Feb. 25, 2026. The Treasury Department was the primary agency handling industry lobbying against the proposal.

No current federal law requires banks or other financial institutions to verify customers' citizenship as a condition of opening or maintaining an account. Banks are required to verify identity under the Bank Secrecy Act and anti-money-laundering rules — using documents like a driver's license, Social Security number, or tax identification number — but citizenship is not part of standard Know Your Customer requirements. The proposal would represent a fundamental change to how Americans access the financial system.

The banking industry has opposed the proposal strongly. Major banks lobbied the Treasury Department directly, arguing the requirement would be operationally 'unworkable.' Their central objection: approximately half of all Americans do not have a valid passport, which is the primary document that establishes citizenship. A driver's license establishes identity but not citizenship. A birth certificate establishes place of birth but is not standardized across states and is not something most Americans carry.

Legal experts told reporters that a simple executive order cannot impose new requirements on banks. Financial regulation is governed by statute — primarily the Bank Secrecy Act, the Dodd-Frank Act, and the Bank Holding Company Act. Changes to bank customer requirements must go through the federal rulemaking process under the Administrative Procedure Act, which requires a public comment period, agency review, and typically takes one to two years at minimum. Any attempt to bypass that process through executive order would face immediate legal challenges.

The practical effect of the proposal, critics argue, would be to convert banks into immigration enforcement tools. An individual who cannot document citizenship — including undocumented immigrants, some permanent residents in certain circumstances, and Americans who lack the required paperwork — could be denied banking services or flagged for investigation. Approximately 4.4% of the U.S. workforce — roughly 7.4 million people — is estimated by the Pew Research Center to be undocumented. Many of those individuals currently have bank accounts and pay taxes using Individual Taxpayer Identification Numbers issued by the IRS.

The proposal fits within a broader pattern of the Trump administration using the financial system as an immigration enforcement mechanism. In early 2026, the administration had already directed Treasury to identify potential methods for restricting financial access by undocumented immigrants. Secretary SBScott Bessent had been tasked with coordinating cross-agency efforts to cut off financial services to people in the country without legal status.

Access to banking is considered a prerequisite for full participation in the formal economy — without a bank account, individuals cannot receive direct deposit paychecks, build credit histories, access mortgages, or efficiently pay bills. The Federal Deposit Insurance Corporation's most recent survey estimated that approximately 5.9 million U.S. households — 4.5% of all households — are unbanked. Excluding additional people from the banking system would deepen poverty and push more economic activity into informal cash markets.

The proposal has a historical parallel in post-9/11 anti-terrorism finance measures, which required banks to collect more information about customers. The USA PATRIOT Act of 2001 strengthened Know Your Customer rules and required banks to verify the identity of customers opening new accounts. The citizenship proposal is structurally different — it would retroactively apply to existing accounts, not just new ones — which significantly increases the implementation complexity.