The U.S. administration is pushing an unprecedented plan to require banks and other financial institutions to collect citizenship information. On the surface, the intent is to fundamentally block undocumented immigrants from opening bank accounts and cut off their economic activity base.
But in Washington, some say the move is a calculated political gambit to forcibly shore up America's uniquely lax identity verification system and, further, to root out disputes over election fraud.
According to reports from major outlets including the Wall Street Journal (WSJ) on the 25th, local time, the Trump administration is reviewing a plan led by the Treasury Department that would compel banks to require official documents such as passports that can prove citizenship for not only new accounts but also existing accounts.
Under current law, opening a bank account in the United States is not difficult even for non-citizens. U.S. banks now verify basic information such as name, date of birth, address and Social Security number (SSN) when opening accounts under the Bank Secrecy Act (BSA) and know-your-customer (KYC) rules. U.S. citizens can open accounts with just a state driver's license and an SSN. They are not separately required to provide documents proving citizenship. There is also no system for banks to share citizenship information they collect with the federal government.
The process is similar for lawful foreign residents. Student and work visa holders can open accounts without much difficulty by submitting a passport and visa, entry and exit records such as an I-20 or I-94, and proof of address. Even undocumented immigrants have been able to open accounts at some banks, community banks, and credit unions with an Individual Taxpayer Identification Number (ITIN), their home-country passport, and proof of address such as utility bills. The long-standing judgment of the U.S. government has been that it is advantageous to bring even undocumented immigrants into the formal financial system first to track the flow of funds.
The United States does not have a unified nationwide government ID system centrally managed by the federal government, as in Korea or major European countries. The Social Security number, introduced in the 1930s, effectively serves as a national ID for tax payment and financial transaction. But its fundamental limitations are clear. Because biometric data such as photos or fingerprints are not included at all in the issuance process, it is extremely vulnerable to identity theft. Above all, the Social Security number alone cannot clearly prove whether the holder is a full U.S. citizen or merely a lawful resident with a work visa, and so on.
In daily life and government offices, state-issued driver's licenses are used most commonly as identification. The issuance standards and security levels for driver's licenses vary widely across the 50 states. In Democratic strongholds such as California and New York, undocumented immigrants can legally obtain driver's licenses in the name of protecting human rights.
Because there is no solid, unified means of identification at the national level, there is constant friction and leakage in areas where strict proof of eligibility is essential, such as voting. In particular, the structurally lax identity verification system has served as a fuse for allegations of election fraud that roil U.S. politics every election season. Republican-leaning states such as Texas and Florida require strict, government-issued photo IDs in advance for voting. In contrast, in key battlegrounds such as Pennsylvania and in Democratic-leaning states, people can vote with just signature verification or utility bills listing their address and name. There are also plenty of districts with no ID checks at all. President Trump and Republican supporters have repeatedly argued that undocumented immigrants who are not citizens exploit these institutional gaps to participate illegally in large numbers and distort election outcomes. If the Trump administration mobilizes the financial infrastructure to build a massive databases that thoroughly verify the citizenship status of virtually all residents in the United States, this data could be cross-used in the future to compare with state voter rolls.
The Trump administration is reportedly considering using the Financial Crimes Enforcement Network (FinCEN) under the Treasury Department to secure citizenship-related data. The agency enforces laws against money laundering and terrorist financing in the United States. Banks must promptly report to this body when large cash transaction or suspicious circumstances are detected. The current federal Bank Secrecy Act grants FinCEN the discretion to decide which documents banks must collect for identity verification. Major outlets reported that a shake-up of senior officials overseeing FinCEN and economic sanctions programs within the Treasury is imminent.
Political reactions split sharply along partisan lines. Republican Sen. Tom Cotton said he strongly supports President Trump's decisive action to prevent undocumented immigrants from gaining unauthorized access to our banking system. He is the one who sent a letter to Treasury Secretary Scott Bessent last year saying that access to the U.S. banking system should be a privilege reserved only for those who fully respect our laws and sovereignty. The White House, on the other hand, appears cautious, mindful of a potential public backlash. White House Spokesperson Kush Desai drew a line, saying it was reporting on a potential policy still in the formative stage that has not been officially announced.
Banks said that for the administration to force new requirements, the Financial Crimes Enforcement Network under the Treasury would have to go through a formal rulemaking process that takes months. They strongly pushed back against the sudden and sweeping regulatory tightening. Retroactively collecting citizenship information from tens of millions of existing accounts one by one is expected to cause astronomical administrative expense and major disruption on the front lines. Moreover, roughly half of the U.S. population has never traveled abroad and does not hold a federal ID such as a passport. Even ordinary citizens could face great difficulty proving their citizenship.
Experts assessed that the measure is not merely about adding one more bank regulation, but a significant attempt to redefine the concepts of identity and rights that underpin American society. The leading Spanish-language daily El País said that if this measure is implemented, millions of undocumented immigrants will be expelled from the formal financial system, calling it a historic turning point for the U.S. financial system. University of Michigan professor Jeremy Kress said in an interview with the Washington Post (WP) that the order could bar even lawful residents from using the banking system, pushing vulnerable groups into costly, informal financial services. He added that it is a thorough weaponization of the banking system to achieve political goals.