Executive order avoids citizenship collection requirements

President Donald Trump issued an executive order on protecting the U.S. financial system from illicit activity that does not include ICBA-opposed language that would require banks to collect citizenship information from their customers.

About the Executive Order: Among its provisions, the EO:

• Directs federal banking regulators to propose changes to Bank Secrecy Act regulations to strengthen customer due diligence requirements.

• Directs the agencies to issue guidance on managing the credit risks of extending loans and financial services to immigrants without work authorization.

• Directs the Consumer Financial Protection Bureau to consider modifying regulations to clarify that potential deportation and loss of wages are factors that could affect a borrower’s ability to repay a loan under “ability-to-repay” standards.

• Directs the Treasury Department to issue a formal advisory to financial institutions identifying red flags and suspicious activity patterns tied to illicit activity.

ICBA Advocacy: Following reports that the pending EO would require banks to collect a new category of documents, such as a passport, from new and existing customers, ICBA has repeatedly shared concerns with administration officials.

• In a recent letter to Treasury Secretary Scott Bessent and National Economic Council Director Kevin Hessett, ICBA said any such mandate would impose substantial burdens on community banks, which already operate under rigorous know-your-customer and due diligence requirements.

• ICBA in March met with Treasury Department leaders following reports that the administration was considering the EO and relayed community banker concerns with the impact of any such action on their banks, customers, and communities.

• ICBA has also met with FDIC, OCC, and Federal Reserve representatives to convey community banker concerns with the potential action.

ICBA Response: In a news release following the release of the executive order, ICBA said the EO recognizes requirements that community banks meet under the Bank Secrecy Act and reiterated the importance of avoiding information collection requirements that impose burdens on community banks.

READ THE ORDER