HOUSTON — The Treasury Department issued new guidance that allows banks to quickly share information about suspected customers. This guidance includes an advisory directing banks to flag signs that customers may lack legal immigration status.
The administration described the new banking guidance as targeting fraud and crime, rather than immigration. Treasury Secretary Scott Bessent stated, "The information in your purview can help stop a cartel financier, disrupt a money laundering network, uncover labor exploitation, or protect taxpayers from fraud."
The new guidelines stem from a May executive order signed by President Donald Trump. This executive order instructs banks to examine customer citizenship more closely. It also directs bank regulators and government departments to identify signs of individuals without legal status opening accounts, obtaining loans, or obtaining credit cards.
The May executive order does not explicitly mandate banks to collect customer citizenship information. Banks previously could share customer information with other banks under the Patriot Act program if money laundering or fraud was suspected. The new guidance permits banks to share customer information in real time.
The new guidance also broadens the reasons banks can share information to include indicators historically linked to immigration status. For example, holding an individual taxpayer identification number is now among the indicators that may prompt information sharing between banks. Individual taxpayer identification numbers are disproportionately used by undocumented immigrants for work applications.
Bessent characterized the new guidance as part of routine banking operations. He added, "The advisory does not ask banks to become immigration officers. It asks banks to do what they do best: know their customers, identify risk, recognize suspicious patterns, and report illicit activity when they see it." Banks do not currently collect customer citizenship information. The banking industry had previously lobbied against requiring banks to collect customer citizenship information.
No independent assessment was available for this report.