Treasury Secretary Scott Bessent told Semafor this week that a proposed executive order requiring banks to collect citizenship information from customers is “in process,” the clearest signal yet that the Trump administration intends to close a gap that has allowed illegal immigrants to access the American financial system with little scrutiny.
The disclosure, first reported by The Hill, moves a policy idea that had circulated for months into something closer to reality. If signed, the executive order would direct banking institutions to request additional identification documents from customers, a step that could reshape how millions of people interact with the country’s financial infrastructure.
Bessent framed the proposal in blunt, common-sense terms during his Monday interview with Semafor:
“And I don’t think it’s unreasonable, because why don’t we have information on who’s in our banking system?”
He went further, pointing to practices abroad as a comparison:
“I have a place in the UK; they want to know who lives in every apartment, and how do we know that it’s not part of a foreign terrorist organization?”
That second remark connects the banking proposal to national security, not just immigration enforcement. The logic is straightforward: if foreign governments already demand to know who occupies a residential unit, the United States can reasonably ask who holds accounts in its banks.
A long paper trail leads to this moment
The draft executive order was first reported earlier this year, and the policy conversation has been building since at least last October. That month, Sen. Tom Cotton (R-Ark.) sent a letter to Bessent urging the Treasury Department to act. Cotton’s language left little room for ambiguity about the problem he wanted addressed.
“Access to the American banking system is a privilege that should be reserved for those who respect our laws and sovereignty.”
Cotton’s letter called on Treasury to “undertake a comprehensive review of current rules that allow illegal aliens to obtain financial services and access to the US banking system.” After The Wall Street Journal reported that banks could begin requiring customers’ passports under the new policy, Cotton reposted his October letter on X, signaling that the administration appeared to be acting on his request.
The senator’s framing cut to the heart of the issue. As he wrote in the letter:
“When individuals are allowed to open accounts without verifying legal status, we are permitting illegal aliens to establish financial roots and integrate economically, all while bypassing the legal channels that millions use properly.”
That argument resonates with anyone who has watched the immigration debate for the past decade. Illegal immigrants who gain access to bank accounts, direct deposits, and credit lines can embed themselves in the economy in ways that make enforcement harder and removal more complicated. The financial system becomes a tool for permanence, one that legal immigrants and citizens must navigate with far more paperwork and scrutiny.
The administration has been weighing this executive order on bank citizenship verification for some time, and Bessent’s public confirmation suggests the internal deliberations have advanced beyond the drafting stage.
What the policy would actually do
Details remain thin on the precise identification documents banks would be required to collect. But one early report from Semafor, published in February, indicated that REAL IDs would not qualify as eligible documents under the new requirement, because REAL IDs do not prove citizenship.
That distinction matters. A REAL ID confirms identity and lawful presence for domestic travel purposes, but it does not establish whether the holder is a U.S. citizen, a lawful permanent resident, or someone on a temporary visa. If the executive order excludes REAL IDs, it would force banks to request documents that actually verify citizenship status, passports, naturalization certificates, or birth certificates.
The Wall Street Journal’s reporting that banks could begin requiring passports aligns with that framework. For American citizens, a passport is the most common single document that proves both identity and citizenship. For non-citizens with lawful status, it would likely mean presenting a foreign passport alongside a valid visa or green card.
Several open questions remain. It is unclear whether the policy would apply only to new account openings or also to existing customers. The scope of the requirement, whether it covers all banking services or only certain account types, has not been publicly defined.
Those details will determine how disruptive the order is in practice and how quickly banks can implement it. But the principle behind it is not complicated: know who is in the system.
The White House plays it close
The administration has been cautious about getting ahead of an official announcement. Back in February, White House spokesman Kush Desai told NewsNation, The Hill’s broadcast partner, that premature coverage should be treated with skepticism:
“Any reporting about potential policymaking that has not been officially announced by the White House is baseless speculation.”
That was February. By this week, the tone had shifted. On Tuesday, a White House official told The Hill that the Trump administration “continues to explore ways to protect our banking system from unacceptable credit risks and to ensure that banking services remain available and affordable for all Americans.”
The phrase “unacceptable credit risks” is worth pausing on. It frames the policy not merely as an immigration enforcement tool but as a financial stability measure. Banks that extend services without verifying legal status take on risks they may not fully understand, risks that taxpayers and lawful depositors ultimately absorb.
The shift from “baseless speculation” in February to “continues to explore” in April tracks with Bessent’s own confirmation that the order is “in process.” The administration appears to have moved from denying the premise to acknowledging the direction of travel.
This fits a broader pattern. The administration has used executive authority aggressively across multiple policy areas, from trade to immigration, often telegraphing moves before formalizing them.
Why this matters beyond immigration
Critics will frame this as a dragnet that burdens ordinary Americans. That argument deserves a direct answer. Every American who has ever opened a bank account already provides a Social Security number, a government-issued ID, and proof of address. The existing Know Your Customer and anti-money-laundering rules already require banks to verify identity. What they do not consistently require is verification of citizenship or lawful immigration status.
That gap exists because policymakers chose to leave it open. For years, the financial industry and its regulators treated the question of legal status as someone else’s problem. The result is a system where an illegal immigrant can open a checking account, receive direct deposits, build a credit history, and access financial products, all without ever proving the right to be in the country.
Cotton put it plainly: allowing that to continue means “permitting illegal aliens to establish financial roots and integrate economically.” That integration is not accidental. It is the predictable consequence of rules that were written to avoid asking hard questions.
The legislative side of this fight has moved slowly. Senate Republicans have struggled to advance even popular election-integrity measures that touch on citizenship verification, which makes executive action a more practical path for the administration.
Meanwhile, the broader economic picture gives the White House confidence to act. With markets reaching historic highs, the administration has political room to pursue structural reforms that might draw institutional pushback under weaker economic conditions.
The bottom line
Bessent’s confirmation strips away the ambiguity. The executive order is not a rumor. It is not speculation. It is, in the Treasury Secretary’s own words, “in process.”
The timeline from Cotton’s October letter to Bessent’s April confirmation spans roughly six months, not fast by Washington standards, but steady. The Wall Street Journal’s reporting on passport requirements and Semafor’s reporting on the exclusion of REAL IDs suggest the policy has been refined, not shelved.
For millions of Americans who follow the rules, provide their documents, and submit to verification every time they open an account or apply for a loan, the question Bessent asked is the only one that matters: why don’t we know who is in our banking system?
If the answer to that question has been “because we chose not to ask,” then the executive order is long overdue. A country that cannot verify who uses its financial system has decided, whether it admits it or not, that the answer doesn’t matter. It does.
