Donald Trump’s order tightens bank checks on non-citizens in the US, cuts collection of citizenship information | Today’s news
President Donald Trump signed an executive order on Tuesday ordering closer scrutiny of the banking activities of non-citizens living in the United States. The order is more limited than an earlier U.S. Treasury proposal that would have required banks to collect customer citizenship information, according to Reuters.
The measure is the latest in a series of Trump administration proposals that have reportedly shaken up the banking industry. Earlier this year, officials floated the idea of ​​mandating the collection of citizenship data, while in January Trump called on credit card companies to cut interest rates to help address the rising cost of living. He also accused the big Wall Street banks of discriminating against conservatives, which the banks deny.
The executive order issued Tuesday does not require banks to collect customer citizenship information. It does, however, authorize the U.S. Treasury Department to issue guidance to financial institutions regarding red flags related to payroll tax evasion, hidden account ownership, off-the-books wage payments, human trafficking, and the use of Individual Taxpayer Identification Numbers (ITINs) to open accounts or obtain credit without confirmed legal status in the United States.
According to an overview released by the White House, the executive order directed the U.S. Treasury Secretary and other financial regulators to “consider changes to the Bank Secrecy Act to strengthen customer identification program requirements, including consideration of the risks that foreign consular identification cards pose to the U.S. financial system.” The Bank Secrecy Act requires banks to monitor potential criminal activity and take appropriate action.
The order also directs the Treasury Secretary to issue formal recommendations to “financial institutions that identify red flags and suspicious patterns of activity.”
What did the analysts say?
According to a Reuters report, a senior executive at a major bank said on condition of anonymity that the revised order suggests the administration has taken the industry’s concerns into account and is willing to adjust its approach. Banking leaders warned that forcing institutions to collect information about customers’ citizenship or immigration status would be costly and operationally disruptive.
Ed Mills, a Washington political analyst with Raymond James, said, “It’s clear the administration wants more immigration control, but banking regulators have always wanted as many financial transactions as possible to go through traditional financial systems,” adding, “That would remove many individuals from the financial system, which could create national security.”
According to a Reuters report, the banks said that verifying the immigration and state status of all existing customers would be extremely difficult and practically impractical. Industry groups have warned that such a requirement could result in the loss of access to banking services for millions of customers and could limit financial access for many people in the United States.
The latest executive order lists several potential red flags for banks to monitor, including accounts registered under shell companies, the use of certain payment platforms to conceal payroll payments and repeated cash withdrawals. It also directs banks to flag the use of Individual Taxpayer Identification Numbers (ITINs) when they are not accompanied by a Social Security Administration number or a valid work visa.
The White House also said the U.S. Treasury and financial regulators should consider changes to the Bank Secrecy Act to make it easier for banks to obtain customer information, saying identification documents issued by foreign consulates pose potential risks.
(With agency input)
