Banking activities of U.S. non-citizens to face heightened scrutiny under President’s executive order Donald Trump Tuesday, but the scope of the directive is less broad than a previous Treasury Department proposal requiring banks to collect citizen information on their customers. this trump card The government has proposed a series of bank-friendly policies, including the idea of collecting citizen data earlier this year. January, trump card He also called on credit card providers to cap interest rates to address cost-of-living concerns, catching the industry off guard, and accused Wall Street banks of discriminating against conservatives, a claim they deny.
However, the latest order issued on Tuesday did not ask for citizenship data. Instead, it directs the Treasury Secretary to issue recommendations to banks to identify red flags related to tax evasion, concealment of true account ownership, off-the-books payroll payments, labor trafficking, and the use of individual taxpayer identification numbers to open accounts or obtain credit without verification of legal presence in the United States.
An executive at a major bank who spoke on condition of anonymity said the proposal was seen as an example of the government listening to the industry, adding that it showed the government was open to change. Senior industry executives have warned that requiring banks to collect data on customers’ citizenship or immigration status would be costly and disruptive.
“Obviously, the administration wants to tighten controls on immigration, but bank regulators have always wanted as many financial transactions as possible to go through the traditional financial system,” said Ed Mills, Washington policy analyst at Raymond James. “That would take a lot of people out of the financial system, which could also create a national security risk,” he added. Reuters reported last month that banks believe it would be very cumbersome and nearly impossible to check the immigration status and citizenship status of all existing customers. Trade groups explained that such an order could cause millions of customers to lose their bank accounts and reduce financial services for Americans.
Red flags cited in the latest order include accounts opened in the names of shell companies, the use of specific platforms to disguise salary payments and repeated cash withdrawals. If a Social Security number or work visa is not attached, it should also be marked with an Individual Taxpayer Identification Number (ITIN).
The White House also said the Treasury Department and regulators should propose changes to the Bank Secrecy Act to make it easier to obtain customer information, citing risks associated with documents issued by foreign consulates.
(Reporting by Nupur Anand and Tatiana Bautzer in New York and Chandni Shah in Bengaluru; Editing by Megan Davies, Mark Porter and Lincoln Feast.)
