A new Republican-backed proposal in Congress would require banks and credit unions to verify citizenship or lawful immigration status before allowing individuals to open or maintain accounts, escalating the debate over financial access and immigration enforcement in the United States.
The measure targets what supporters describe as a loophole that allows individuals not lawfully present in the country to access the U.S. banking system.
The legislation, led in the House by Rep. Keith Self (R-TX) and in the Senate by Arkansas Sen. Tom Cotton (R), would mandate that financial institutions collect documentation proving citizenship or legal residency.
Acceptable forms of verification would include U.S. passports, REAL ID-compliant driver’s licenses, or permanent resident cards.
At its core, the proposal reflects a broader push among conservative lawmakers to tie access to financial services more directly to immigration status.
Supporters argue that the banking system should not be treated as separate from broader immigration enforcement efforts and contend that financial access can be used to sustain unlawful presence in the country.
Rep. Self has described the legislation as establishing a “hard line” on eligibility for financial services, arguing that individuals who enter the country illegally should not be able to utilize taxpayer-supported institutions.
Sen. Cotton has echoed that position, stating that access to the U.S. financial system should be reserved for those who comply with American law and sovereignty.
Under the bill, individuals with temporary legal status would be required to certify eligibility under a structured compliance system, while accounts could be reviewed or closed if documentation expires or is not updated.
Financial institutions would also face enforcement requirements designed to ensure compliance, along with protections for banks that make good-faith efforts to follow the rules.
The proposal also includes penalties for individuals who knowingly attempt to open or maintain accounts while not lawfully present in the United States.
Supporters say these provisions are intended to strengthen enforcement and reduce what they view as misuse of financial systems, according to The Daily Signal.
The legislation comes amid broader discussions within conservative policy circles and the Trump administration about tightening oversight of financial institutions.
Treasury Secretary Scott Bessent has previously said that requiring banks to collect immigration-related data from customers is under consideration and would not be unreasonable, citing concerns about transparency and security risks in the financial system.
A White House official has said the administration is still evaluating options related to financial oversight and has not finalized any executive action.
Officials have pointed to ongoing efforts to balance access to banking services with concerns about fraud, enforcement, and national security.
The proposal is expected to face debate in Congress over privacy implications, enforcement feasibility, and the logistical challenges banks would face in verifying citizenship status across millions of accounts.
Critics are likely to argue that the measure could create compliance burdens for financial institutions, while supporters frame it as a necessary step in strengthening immigration enforcement through financial oversight.
As the legislation moves forward, it is likely to become part of a broader national debate over how far federal policy should go in linking immigration status to access to everyday financial services.
