Trump Administration Drafts Executive Order: Banks Would Require Proof of U.S. Citizenship to Open Accounts

The Trump administration is preparing a draft executive order that could require banks to collect proof of citizenship from customers. According to industry consultants, this would represent a major break from current practice and could cut millions of Americans off from financial services.

The draft order suggests that banks would need to request documents proving citizenship—such as a passport—in addition to the information they already collect during onboarding, including a person’s name, date of birth, and a verified address. It also emphasizes that REAL ID documents do not count as proof of citizenship, because they do not establish a person’s citizenship status.

Wall Street Journal and Semafor previously reported on the possible changes. Their reporting indicates that the new requirements could apply not only to new customers, but also to existing account holders, forcing banks to re-check millions of account holders under standard KYC (Know Your Customer) procedures.

What exactly is planned to change: which documents could be required

Under the draft, banks would be required to collect documentary proof of citizenship, rather than relying solely on basic customer identification. Examples mentioned include a passport or other records capable of confirming U.S. citizenship.

At the same time, the draft notes that existing identity and address checks are already widely used when customers are onboarded. The new logic would be to add a requirement tied specifically to citizenship status, which experts say could lead to widespread inconvenience and delays.

Confirmation from Treasury: the draft order is in progress

U.S. Treasury Secretary Scott Bessent publicly confirmed that the document is “in the works.” This was the first official mention of the initiative at the cabinet level.

Speaking at the Treasury Secretary Dinner, hosted by Semafor at the Library of Congress, Bessent said he considers the proposal reasonable: “Why don’t we have information on who is in the banking system?”

According to media reports, the idea was first raised by Semafor in February 2026, and then picked up by Axios and other outlets.

Who could face tougher access to banking services

It is still unclear how the rule would be applied—whether it would target only people without verified status, or also those who legally live and work in the U.S. and have authorization to remain.

Critics, however, point to the risk for citizens who may not have documents readily available. For example, Jeremy Savory, CEO of Savory & Partners, says requiring proof of citizenship could be a sharp reversal from the historically more open approach the U.S. has taken toward access to financial services.

Why it could hit citizens: gaps in documentation

Savory emphasizes that a large share of Americans do not have passports. He cites an estimate: in 2025, there were roughly 183 million passports in circulation, while the U.S. population is over 340 million.

It is also noted that, according to estimates from the Brennan Center for Justice, more than 21 million U.S. citizens who are eligible to vote may not have timely access to documents that would allow them to prove citizenship.

David Lesperance of Lesperance & Associates is even more blunt in his criticism, arguing that administrative costs could be excessive and that implementation would lead to chaos across the financial industry.

Timelines that could make the situation painful

One of the key practical risks involves document processing times. Lesperance says obtaining a certificate of naturalization can take 5.5 to 14 months, getting a passport can take 4 to 6 weeks, and receiving REAL ID typically takes about 2 to 6 weeks.

If the executive order is signed, these timelines could increase significantly, the expert says—raising the likelihood of denials for people who fail to confirm their citizenship in time.

Is there regulatory logic here? KYC and AML already exist

Lesperance also questions what problem the new requirement is meant to solve under existing law. He notes that current KYC and AML requirements already address the goals of preventing money laundering and tax violations.

In his view, the initiative’s real function may not be about financial risk at all, but rather about providing additional data to agencies involved in the immigration agenda, including ICE.

International precedents and divisions within the administration

It is also reported that some countries do check a person’s status when opening an account. CEO of Wealthy Expat Raphael Cintron notes that, in several jurisdictions, onboarding involves confirming the legality of someone’s stay, and he points to examples from Europe.

Separately, reports say there is no unified view inside the administration on how strict the approach should be. Bloomberg reported that some Treasury staff allegedly support a softer version—where banks could certify a customer’s citizenship without requiring repeat document verification for every existing account holder.

Banking-sector concerns and political backing

As previously reported, banking industry groups have expressed concerns about the feasibility of the proposal and the risk that it could push some people out of the legitimate banking system.

A tougher version is also supported by Senator Tom Cotton (R-Ark.). In October 2025, he sent a letter to Scott Bessent urging a reconsideration of rules that, in Cotton’s words, allow “illegal foreigners” to access financial services. Cotton describes the banking system as a privilege intended for those who respect U.S. laws.

Savory argues that the priorities are misplaced and says regulators should focus more on problems surrounding financial platforms and potential conflicts of interest than on making account openings more complicated for ordinary people.

What remains unknown: rollout timing and requirement details

For now, two key questions remain unanswered: which documents will be considered acceptable in practice, and whether re-verification will be required for existing customers. Scott Bessent has not named a publication date or an effective date for the executive order.

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