UPDATE 1-Trump backs down from requiring banks to collect citizenship information, Semafor reports
The White House was earlier expected to issue an order requiring banks to collect data on their customers' citizenship or immigration status, a directive senior industry executives had warned would be costly and disruptive. The order will also direct Bessent and other regulators to propose changes to Bank Secrecy Act regulations that empower financial institutions to seek additional information when needed, strengthen customer due-diligence requirements and enhance consumer identification requirements, according to Semafor.
U.S. President Donald Trump will sign a pair of executive orders on Tuesday, among which is a step back from a previous proposal requiring banks to collect citizenship information from customers, Semafor reported, citing a White House official.
The final version of one of the executive orders will instead direct Treasury Secretary Scott Bessent to advise financial institutions on ways undocumented immigrants might open accounts or receive loans, the Semafor report said. The White House was earlier expected to issue an order requiring banks to collect data on their customers' citizenship or immigration status, a directive senior industry executives had warned would be costly and disruptive.
The order will also direct Bessent and other regulators to propose changes to Bank Secrecy Act regulations that empower financial institutions to seek additional information when needed, strengthen customer due-diligence requirements and enhance consumer identification requirements, according to Semafor. The second executive order is intended to foster closer cooperation among financial institutions, fintech companies and federal regulators, Semafor added.
The order requires the Federal Reserve to review and reassess its criteria for determining which non-bank financial entities and uninsured depository institutions can access its payment services and accounts, the report said. Reuters could not immediately verify the Semafor report. The White House did not respond to a request for comment.
Existing know-your-customer rules require verifying identity and basic data like Social Security numbers but do not require checking citizenship or immigration status. Bankers warned that verifying documents for new customers could be very burdensome and nearly impossible for existing ones, Reuters reported in April, suggesting that most banks might limit online account openings.
The requirement posed significant enforcement risks for banks if authorities pursued lenders for inadequate document checks, the report said.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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