Banks Await White House Order on Citizenship Data Collection Requirement

U.S. banks are waiting for a White House order that could force them to collect customers’ citizenship or immigration-status data, a demand that would collide with already strict compliance systems and inject fresh uncertainty into account opening across the country.

Treasury Secretary Scott Bessent has said the administration is working on the directive, but bank executives, lobbyists and compliance specialists still do not know what it will require. Banks have had little communication in recent weeks, leaving them unsure whether the final order will be narrow, broad or tied to enforcement. That ambiguity matters because lenders already operate under the Bank Secrecy Act anti-money-laundering framework and Customer Identification Program rules, which require identity verification but do not generally require citizenship documents.

A new mandate would force banks to redesign account-opening systems, retrain staff, update software and review legal exposure across millions of current and potential customer records. Kathryn Judge, a Columbia Law School professor, described the problem as one with “logistical challenges,” a phrase that only begins to capture the scale of the operational overhaul banks say they would face if the directive moves forward.

Industry groups have warned that the policy could be operationally and legally complex, expensive and likely to push more people out of the banking system. The American Action Forum estimated that even collecting citizenship information for new accounts alone could add 33.1 million to 73.3 million paperwork hours and cost the industry $2.6 billion to $5.6 billion a year. Banks could also pass higher compliance costs to consumers or tighten access for lower-income customers, a shift that would deepen the number of people operating outside mainstream finance.

The issue has already reached Capitol Hill. Sen. Tom Cotton introduced the Know Your American Customer Act on March 25, 2026, to require certain financial institutions to verify customers’ citizenship and legal status, and the measure was referred to the Senate Banking, Housing, and Urban Affairs Committee. The bill’s full title is To amend title 31, United States Code, to require certain financial institutions to verify the citizenship and legal status of individuals, and for other purposes.

The stakes are large because the United States still has a sizable unbanked population. The FDIC’s 2023 National Survey of Unbanked and Underbanked Households found that 4.2% of U.S. households, about 5.6 million households, were unbanked. In Washington, the fight over a vague federal directive is now shaping up as a broader test of how far immigration enforcement can reach into ordinary financial life.