The Trump administration has delayed an executive order that could have required banks to collect and report more information on the immigration status of their customers, after Wall Street and small community lenders pushed back on that plan, according to three people familiar with the internal deliberations.
In meetings with administration officials, representatives of the banking industry argued that requiring millions of existing customers to provide records verifying their citizenship status was not practical. The delay has not been previously reported, and such an order could still be revived, said the people who spoke on the condition of anonymity to discuss private discussions. But it is expected to be significantly narrowed from earlier drafts.
The original idea, reported earlier by The Washington Post, could have gone well beyond existing “know your customer” rules. Generally, banks collect a customer’s name, date of birth and address, verified with a driver’s license, to guard against money laundering and other financial crimes. The order could have required new forms of documentation, such as a passport, to verify citizenship, from both new and existing customers, the people said.
Any revived push may only apply to new accounts, rather than requiring banks to determine the immigration or citizenship status of existing customers. Such a change would substantially reduce the operational burden, though industry officials said it would still represent a major administrative undertaking.
A White House official acknowledged the administration is working on an order that could touch on immigration and banking but denied it ever seriously considered requiring citizenship audits of existing customers. The official, who spoke on the condition of anonymity to discuss internal deliberations, said new bank customers could be targeted under a coming order but disputed The Post’s characterization without elaborating.
The apparent delay adds the banking system to a list of fronts on which the administration’s immigration enforcement ambitions have met legal, logistical or political resistance. Courts have blocked or curtailed deportation-related initiatives, while a program to track undocumented immigrants through private contractors stalled after the lead contractor said in January that its contract was not being executed.
The idea of using the banks to crack down on illegal immigration predates the administration itself. During the transition, officials discussed using the banking system as an immigration enforcement tool, according to two people familiar with those conversations, suggesting the proposal reflects a long-held priority rather than an improvised response to enforcement gaps.
Proponents have privately compared the concept to E-Verify, an online service designed to help employers confirm work eligibility, casting it as a logical extension of existing efforts to verify immigration status. They also contend that existing documentation requirements used by banks don’t go far enough since many states allow undocumented workers to obtain driver’s licenses. Stricter scrutiny of immigration status would make it more difficult for illegal immigration without affecting noncitizens living or investing in the country lawfully, they say.
When asked about the issue at a hearing earlier this month, Jonathan Gould, who serves as one of three top banking regulators, minimized the additional regulatory burden on lenders.
“I think the additional burden would be minor,” said Gould, whose office — the Comptroller of the Currency — is part of the Treasury Department, which is said to be deeply involved in developing the plan.
Industry representatives have raised a series of specific concerns, including that it is logistically unworkable at banks with millions — or even tens of millions, in the case of the biggest Wall Street lenders — to make operational a requirement to verify that each existing account holder was a legally documented U.S. citizen or resident at the time they opened their account.
They also said the program could backfire by inadvertently locking out American citizens from the traditional financial system. Roughly half the U.S. population does not have a passport, a document the administration had floated as a potential proof of status. Some community bankers pointed to communities such as the Amish and Native Americans, who are far less likely to hold passports, as populations that could find themselves suddenly unable to access traditional financial services.
Another line of pushback argued the plan cuts against the administration’s economic goals. Requiring documentary scrutiny of noncitizens who live in the United States or conduct business here, executives warned, could inadvertently chill commerce and investment in ways that conflict with other White House priorities.
Yet another practical concern: With a growing share of accounts opened digitally, banks worried that existing customers who received an email requesting additional documentation would simply ignore it, as many do with routine bank correspondence, leaving institutions in legal limbo over how to proceed.
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