Administrative order on bank's collection of citizenship information ‘in progress’, rechecking of Korean account management
In the United States, bank accounts are the most basic daily infrastructure. The entire process of receiving salaries, paying rent, paying for children's education, and sending remittances to one's home country revolves around having an account. However, over the past few months, discussions surrounding this ‘taken-for-granted“ aspect have been rapidly progressing within the administration. There are reports that an executive order is being prepared to mandate banks to directly verify customers” citizenship status. The Wall Street Journal (WSJ) and others reported on internal reviews in late February 2026, and on April 13, Treasury Secretary Scott Bessent officially confirmed in an interview with Semafor that the executive order is ‘in the works." This statement was reported the following day by Bloomberg and The Hill, and on April 13, Secretary Bessent reiterated the same message in a separate interview with CNBC. On April 13, a TIME article summarizing the policy's outline spread tension among both financial institutions and immigrant communities. The Treasury Secretary's repeated official statements are being interpreted as a signal one step more concrete than the usual rhetoric of "under review.".
What's ‘in progress" - the outline of the reported executive order
“Even before regulations become documents, their shadows arrive at the counter first.”
Minister Besen's interview with Semana on April 13th garnered attention for two key points. Firstly, he countered by asking, “Why don't we have information about who is in our banking system?” and described the collection of citizenship information as “not an unreasonable demand.” Secondly, citing his own home in the UK as an example, he stated, “In that country, they want to know who lives in every apartment.” He then posed the question, “How do they verify that tenants are not connected to foreign terrorist organizations?” These statements highlight the point where the demand for citizenship collection is linked to national security logic. Subsequently, in a separate interview with CNBC on April 15th, he further clarified the target and justification of the policy by stating, “Undocumented immigrants have no right to enter the banking system.”.
A TIME article on April 16th reported that the expected order would apply not only to opening new accounts but also to existing customers. This means that even customers who have been trading for decades may be required to provide new documentation. The key point in the documentation requirements is that REAL ID is not recognized as proof of citizenship. While REAL ID is a state-issued identification that meets federal security standards, it does not, by itself, prove citizenship. A U.S. passport was most frequently mentioned as primary proof, and the way secondary documents like birth certificates will be used has not yet been officially confirmed.
According to estimates by the American Action Forum, if this order is implemented, the paperwork for the citizenship verification work that banks would have to perform on approximately 53 million newly opened accounts annually would range from 33 million to 73 million hours, resulting in regulatory costs of $2.6 billion to $5.6 billion. The same report warns that including re-verification of existing customers could exceed 85 million hours and $6.5 billion annually. As of fiscal year 2024, there are approximately 170 million valid U.S. passports, which is about half of the total U.S. population. While the numbers are fluid as the specific wording of the order has not yet been released, the scale of the preparation is already clear.
In an interview with CNBC on April 15, Minister Wesensent also added, “If the Treasury Department and banking regulators deem it their job, then it is their job.” This is a signal that the customer identification procedures, which had been previously introduced at the discretion of the Treasury Department and financial regulatory authorities, will be formalized at the level of an executive order. Bloomberg and The Hill reported on the “ongoing” remarks earlier in the same week in separate articles, but did not specify an exact release date. Many practitioners anticipate that the actual operational guidelines may not be issued until the latter half of 2026, considering the period for regulatory agencies to gather opinions before signing and the 60-180 day implementation preparation period after signing.
◆ Different from the ‘Fair Banking’ order in August 2025
“Even the same word, ”same bank,' can become completely opposite laws depending on who you exclude."
On August 7, 2025, President Trump signed an Executive Order titled ‘Guaranteeing Fair Banking for All Americans.’ This order prohibited the practice of ‘debanking,’ where banks close accounts or refuse new account openings based on a customer's political beliefs or reputation risk. Federal financial regulators were required to review past practices by December 5, 2025, and the Treasury Department was to develop a comprehensive strategy by February 3, 2026. Ostensibly, this order was a measure to protect bank users.
However, the ongoing citizenship information collection plan in spring 2026 contains a force in a different direction. Once this order is signed, banks will have to verify their customers' immigration status, and customers whose status cannot be verified may have their services restricted. One order prohibits obstruction for political reasons, while another order provides grounds for obstruction based on immigration status. When both orders are in effect simultaneously, banks' discretion will be narrowed, and government standards will come to the forefront. If a customer is mistakenly blocked, it could lead to a dual risk: violating the fair banking order, or violating the new order if citizenship verification is neglected.
This plan is structured to be layered on top of the existing Bank Secrecy Act and Know Your Customer (KYC) frameworks. Currently, banks verify customer identities using Social Security Numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs), and identification documents, but there is no single national regulation mandating the collection and storage of citizenship status. Once the order is signed, the Treasury Department, FinCEN, OCC, and others will create detailed regulations, and banks will need to expand their KYC systems. This change goes beyond simply adding a form; it entails a redesign of data structures and overall audit procedures.
Even Citizens Aren't Safe — The Trap of Documents
“The deepest danger lies in the position of being excluded, even though one is not meant to be excluded.”
If this order is implemented, the group most likely to face difficulties first will be people who are actual citizens but do not possess a passport. According to figures released by the U.S. Department of State, there are approximately 170 million valid U.S. passports as of the end of fiscal year 2024, which is just under half of the total population. This means a considerable number of citizens have only used driver's licenses or REAL IDs. Passport ownership varies greatly by region, age, and income. For citizens with little experience traveling abroad, a passport is not an everyday document but a special proof of identity. Even U.S.-born citizens, regardless of their immigration history, may lack immediate proof of citizenship, especially the elderly or those who have only traveled domestically.
Permanent residents can prove their status with a green card, but if this order is based on ‘citizenship,’ permanent residents are likely to be recorded in a separate category. A bigger issue than the categorization itself is that the recorded information may be shared with other agencies. Immigration and Customs Enforcement (ICE) has already signed an information-sharing Memorandum of Understanding (MOU) with the Internal Revenue Service (IRS) in April 2025, and a sharing agreement with the Centers for Medicare & Medicaid Services (CMS) has also been reported. The moment citizenship information enters bank files, the question of where that information might go in the next step also arises.
Non-immigrant residents (H-1B, F-1, E-2, etc.) are subject to a fragmented document system, including visa stamps, I-94s, I-20s, and EAD cards. If banks apply uniform document submission standards, even legal residents may face documentation gaps due to pending renewals or delays in reissuance. This is particularly worrisome in situations like the gap between F-1 OPT extensions or delays in E-2 renewal reviews, which can jeopardize account maintenance. Undocumented individuals are at greater risk of being pushed towards ‘alternative finance," characterized by higher fees and weaker protections. This is why concerns are continuously being raised from a financial inclusion perspective. Within the banking industry itself, there are concerns that this approach may duplicate existing KYC burdens, leading to increased consumer costs.
◆ Things you can prepare starting now — Korean Professional's Checklist
“The time before a policy is decided is actually the freest time for preparation.”
Since there are no signed orders yet, it is not yet at the stage where banks will immediately ask customers for their passports. However, the window of opportunity for preparation has already opened. First, citizens without passports can consider applying for or renewing one. The U.S. Department of State announced that the general processing time as of April 2026 will be around 4-6 weeks, and expedited processing will take 2-3 weeks. Passport fees are $165 for a new adult passport and $130 for a renewal, with an additional $60 for expedited processing. Since adult passports are valid for 10 years, they are highly useful for travel and identification purposes, regardless of this order. As passport expiration dates often vary among family members, it is efficient to check your family's passport schedules at once during this opportunity.
Second, permanent residents who maintain their Korean nationality must check the expiration dates of both their Korean passport and their U.S. Green Card. The processing time for Green Card renewal (I-90) is approximately 11 months in Immigration Service announced processing times and in actual cases,%; the I-797C receipt notice received after filing automatically extends the validity period of the existing Green Card by 36 months. It is safer to file early for those whose expiration dates are approaching. How banks handle expired documents may vary depending on the specific wording of the directive. Third, it is advisable to ensure that the address, phone number, and name spelling for your existing account match the bank's records. KYC renewal requests often stem from document discrepancies. Fourth, you may want to reconsider the practice of concentrating all your financial activities in one place, and instead, consider diversifying your general deposit, emergency fund, and investment accounts across at least two locations. Fifth, self-employed individuals with only an ITIN should keep an eye out for additional guidance from the Treasury Department. Industries where ITIN usage was common, such as Korean nail salons, restaurants, and laundromats, may see substantial changes in payroll processing and business remittance structures. Sixth, those who need to renew their Korean passport should confirm appointment availability at their relevant consulate abroad in advance, such as the Consulate General of Korea in New York. This is because overseas Korean registration, passport reissuance, and U.S. bank identity verification renewals are often interconnected, creating a structure where delays in one area can lead to delays in others.
Finally, this executive order is likely to face significant challenges through court proceedings and congressional budget and oversight hearings. There is precedent for past Public Charge regulations to be litigated over several years in federal court, following a similar path. A measured response, such as preparing documentation and updating information, would be more reasonable than overreacting at this stage, before the signed order.
Closing remarks
Finance is the most tightly woven infrastructure of daily life within national borders. The attempt to impose a new, nationality-based filter on that infrastructure represents a change of unprecedented scope in U.S. history. The final shape of this discussion will be determined at the intersection of the executive order's wording, the detailed guidance from the Treasury Department, FinCEN, and the OCC, and the rulings of federal courts. One thing is clear at this point: the direction of using bank accounts as a tool for immigration policy has begun to be discussed in official forums.
This change cannot be seen as an issue solely for undocumented immigrants. It is time for even citizens without passports, permanent residents awaiting renewal, and international students and expatriates in visa grace periods to re-examine their document lists. For Korean immigrants, a bank account is more than just a convenience; it is tied to children's tuition, remittances to family back home, cash flow for self-employment, and retirement preparation. Regardless of the final form of the policy, customers with organized documents and consistent records across institutions will experience less shock from the change. We encourage you to take the time to organize the papers in your drawers before the window of opportunity closes. Preparing after the change arrives is always more costly than preparing before it.
Disclaimer: This column is for general information purposes only and is not legal advice for your specific case. You should always consult with an attorney who specializes in immigration law for your individual case.
Law Offices of Jin Dong Cho
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