Non-citizens in the U.S. will face greater scrutiny on their banking activities following an executive order by President Donald Trump on Tuesday, but the directive was less extensive than a previous proposal floated by Treasury requiring banks to collect clients' citizenship information.
The Trump administration has proposed a number of policies that have sideswiped banks, including the idea floated earlier in the year to collect citizenship data. In January, Trump also blindsided the industry by calling for credit card providers to cap interest rates in a bid to address cost-of-living concerns, and he has targeted Wall Street banks for discriminating against conservatives, a claim they deny.
The latest order, issued Tuesday, however, fell short of calling for citizenship data. Instead it directs the Treasury secretary to issue an advisory to banks to identify red flags tied to payroll tax evasion, concealment of true account ownership, off-the-books wage payments, labor trafficking and the use of individual taxpayer identification numbers to open accounts or obtain credit without verified legal presence in the U.S.
Among the examples of red flags cited by the latest order are accounts in the names of shell companies and use of specific platforms to disguise wage payments, and repetitive cash withdrawals. The use of Individual Taxpayer Identification Numbers (ITIN) should also be flagged when not accompanied by a Social Security number or a work visa.
