Treasury Secretary Scott Bessent confirmed that an executive order requiring American banks to collect citizenship information from all customers is currently “in process,” potentially affecting millions of citizens and non-citizens who lack immediate access to citizenship documents.

Banks Face Unprecedented Customer Verification Mandate

Bessent defended the proposal during a Monday interview with Semafor, comparing it to requirements he encounters at his residence in the United Kingdom. “Why don’t we have information on who’s in our banking system?” Bessent asked, raising concerns about potential foreign terrorist organization involvement. The administration told TIME it continues exploring ways to protect the banking system from unacceptable credit risks while keeping services available and affordable for Americans.

The Wall Street Journal reported the order could require banks to request documents like passports from both new and existing customers. Current regulations under the Bank Secrecy Act and USA PATRIOT Act already mandate financial institutions collect basic customer information to prevent money laundering and terrorism funding, but citizenship verification would mark an unprecedented expansion. The administration has not confirmed whether banks would be forced to close accounts for customers unable to provide required documentation.

Senator Cotton Introduces Supporting Legislation

Arkansas Senator Tom Cotton expressed strong support for the executive action, having sent a letter to Bessent in October urging a comprehensive review of rules allowing illegal immigrants to obtain financial services. Cotton subsequently introduced the Know Your American Customer Act, which would make it a federal crime for anyone not lawfully present in the United States to open or maintain a bank account. “Access to the American banking system is a privilege that should only be reserved for those who respect our laws and sovereignty,” Cotton stated.

Critics Warn of Economic and Privacy Concerns

Opponents argue the requirement could impose substantial costs on financial institutions and the broader economy while potentially blocking American citizens from accessing banking services. Privacy advocates have raised concerns about expanded government tracking of customer information. Legal experts predict any executive order would face immediate court challenges. The White House previously dismissed early February reports about the policy as “baseless speculation” before official announcements, though Bessent’s confirmation suggests the administration has moved forward with development.