Trump Delays Bank Citizenship Order as Industry Resists

President Donald Trump's administration has delayed a proposed executive order that could have forced banks to gather more information about customers' immigration status after major financial institutions and community lenders pushed back on the idea, people familiar with the discussions told The Washington Post on Friday.

The proposal had been under development as part of the administration's immigration enforcement agenda.

But banking industry representatives told administration officials in meetings that forcing millions of customers to verify citizenship would be impractical, costly, and disruptive.

The White House has not issued such an order as of Friday, and the administration is still working on an immigration-related banking measure, according to reports and official administration signals.

A White House official has denied the government had seriously considered broad audits of current customers. Any narrower version could instead apply only to new accounts.

The plan under discussion would have expanded "know your customer" rules, which banks already use to collect identifying information aimed at preventing money laundering and other financial crimes.

Those rules do not require banks to verify whether a customer is a U.S. citizen, and a shift in that direction would mark a significant expansion of compliance obligations for lenders across the country.

Industry representatives argued that such a requirement could force institutions to seek documents such as passports or birth certificates from vast numbers of customers, creating major logistical challenges for banks that maintain tens of millions of accounts.

That resistance appears to have helped stall the proposal for now, even as the administration continues to look for ways to use the financial system as part of its immigration crackdown.

The delay also underscores the broader legal, political, and operational limits the administration has encountered as it tries to push immigration enforcement deeper into parts of American life that have not traditionally served as frontline tools for status verification.

At a recent hearing, Comptroller of the Currency Jonathan Gould downplayed concerns about the impact on lenders, saying, "I think the additional burden would be minor."

The Office of the Comptroller of the Currency, an independent agency within the Department of the Treasury, is the nation's top regulator of national banks.

Banking industry representatives and community lenders disagreed, warning that a sweeping citizenship verification mandate could complicate access to basic banking services for some Americans, including customers who may not have easy access to citizenship documents.

Critics also said such a move could undercut the administration's stated economic goals by injecting uncertainty into the banking system and discouraging investment.

The administration's interest in tying immigration enforcement more closely to financial regulation has surfaced alongside other policy moves this year.

In January, the Consumer Financial Protection Bureau and the Department of Justice withdrew a 2023 joint statement on fair lending and noncitizen borrowers, saying the earlier guidance had caused confusion about whether lenders could consider immigration status in some credit decisions.

That withdrawal signaled a broader shift in federal policy under Trump and gave banks and other lenders an early indication that immigration-related financial rules were being reconsidered.

Still, no final banking order has been announced, and White House records of presidential actions through Friday do not show a signed executive order requiring banks to collect customers' citizenship information.

For now, the proposal remains delayed rather than dead, leaving banks bracing for the possibility that the administration could revive the effort in a narrower form focused on new customers instead of current account holders.