ICBA: Citizenship executive order shouldn’t burden community banks

ICBA told the Trump administration President Donald Trump’s executive order on financial services should ensure policies related to immigration impose no additional regulatory burdens on community banks.

Background: Issued last month, Executive Order 14406, “Restoring Integrity to America’s Financial System,” directs the federal banking regulators to propose changes to Bank Secrecy Act regulations to strengthen customer due diligence requirements and issue guidance on managing the credit risks of extending loans and financial services to immigrants without work authorization.

Key Regulatory Concerns: In a letter to the White House, Treasury Department, and Financial Crimes Enforcement Network, ICBA said community banks already maintain robust BSA compliance programs. Noting that ICBA repeatedly engaged Treasury and regulatory officials ahead of the release of the EO to ensure it didn’t require banks to collect and verify citizenship information, ICBA said significant concerns remain about the burdens the EO directives could impose on community banks.

Tailored Implementation: ICBA urged the administration to ensure any implementation of the order is narrowly tailored, coordinated through transparent regulatory processes, and aligned with pending rulemakings focused on modernizing regulations and reducing burdens on community banks.

ICBA Advocacy: Ahead of the release of the EO, ICBA repeatedly called on the administration to avoid requiring community banks to collect citizenship information, including in meetings with Treasury Department and prudential regulatory officials and a letter to Treasury Secretary Scott Bessent and National Economic Council Director Kevin Hessett. In a news release following the issuance of the EO, ICBA reiterated the importance of avoiding information-collection requirements.

Agency Actions: FinCEN, the prudential banking regulators, and the Consumer Financial Protection Bureau this month released advisories responding to the EO.