Banking activities of non-citizens in US to face more scrutiny
What's the story
Non-citizens in the US will now be under greater scrutiny for their banking activities, thanks to a new executive order signed by President Donald Trump. The directive, however, is not as extensive as an earlier proposal from the Treasury Department that called for banks to collect information about their clients' citizenship status.
Directive
Advisory to banks on potential indicators of tax evasion
The latest executive order directs the Treasury Secretary to issue an advisory to banks. The advisory should highlight potential indicators of payroll tax evasion, concealment of true account ownership, off-the-books wage payments, labor trafficking, and use of Individual Taxpayer Identification Numbers (ITINs) to open accounts or obtain credit without verified legal presence in the US.
Industry concerns
Proposal facing backlash from industry executives
Senior industry executives had warned that requiring banks to collect the data on their customers' citizenship or immigration status shall be costly and disruptive. They believed this would force many individuals out of the financial system, potentially creating a national security risk. Banks also considered checking the immigration status and citizenship of all current clients as extremely burdensome and almost impossible, Reuters reported last month.
Financial access
Specific indicators mentioned in the executive order
Trade groups have warned that such an order could lead to the debanking of millions of customers and lower financial access for Americans. The latest executive order cites specific indicators such as accounts in the names of shell companies, use of certain platforms to disguise wage payments, and repetitive cash withdrawals. It also highlights ITIN usage without a Social Security number or work visa as a potential red flag.