Bank service is considered as essential part of our daily life. Now a days people cannot think of passing a day without direct or indirect banking services. Once upon a time, bank account was considered as the mode of savings and safe keeping of money. Now, the situation has changed as banking is now integral part of our daily activity. As soon as people enter High School, bank account and services thereof, is inevitably required. Making necessary payment, using credit card, mortgage loan, car loan, personal line of credit, savings in RESP (Registered Educational Savings Plan), RRSP (Registered Retirement Savings Plan), direct deposit of salary and many other essential services are conducted through bank account. So, opening of bank account and taking services from there, is must, but opening of bank account is not easy task. Providing enough proof and documentation are inevitably required for opening bank account, which is going to be more difficult and stringent in the coming days as Trump administration is in contemplation of putting additional documentation requirement.
Speculation has already started whether Trump administration is going to use banking system as a part of crackdown on undocumented immigrants in the USA. It is learnt from local media report that Trump administration is possibly going to either issue executive order or engage other regulatory action requiring commercial banks to collect citizenship information from the customers. The enhanced measure, which is allegedly in review stage of Treasury Department and if becomes effective, will legally bind banks operating in the U.S. financial system, to ask their customers to provide additional documents, which may even include passport. This requirement may apply to both existing and new customers. As reported in media, the potential measure although at discussion level, has already worried the banks, which are reportedly lobbying and questioning the legal basis for this additional requirement.
It is learnt that Trump administration in principle, has agreed to introduce this enhanced requirement while opening bank account, however, there is dilemma in implementation approach meaning whether implementing through either executive order or Treasury action, is yet to be finalized. While media reported this news, they have mentioned that spokesperson of White House has denied this additional requirement saying that no order has been approved and further added that the administration generally maintains that no ideas are settled until announced by President Trump.
The report has, however, quoted one Senator’s social media post wherein the Republican Senator has mentioned that he has plan to introduce legislation seeking to block banks from allowing immigrants in the country illegally to get bank accounts. He further added that he had issued a letter to Treasury Secretary, Scott Bessent last year stating that American banking system is a privilege that should be reserved for those who respect the U.S. laws and sovereignty. The Senator also said, “I strongly support President Trump taking action to prevent illegal migrants from accessing our banking system”.
Banking service in the USA has already been under strict scrutiny as Trump administration has used Treasury Department’s wing, FinCEN, (Financial Crimes Enforcement Network), which is responsible for enforcing U.S. anti-money laundering and counterterrorism laws, collects information. In fact, these banking compliance related laws are the basis for customer verification requirements and compel the banks to report large cash and suspicious transactions. As learnt from media report, in January FinCEN has issued order requiring banks and money remitting companies operating in two Counties in Minnesota to produce information about international remittance greater than $3,000, whereas the threshold of reporting under CTR is $10,000. Banks have been struggling to comply with reporting requirement, so they are in contemplation of raising this threshold. In this situation, Minnesota’s two counties reporting requirement of $3,000 has put the banks in USA under another challenging environment
Now a days opening bank account and conducting transactions through banking channel has become very difficult and cumbersome process as several documentation and multilayer screening process are involved. In addition to two pieces of valid photo ID (Identification), several documents which include proof of address, social security number, KYC (Know Your Customer) profile contains many historical information, TFAP (Transaction Activity Profile) are mandatorily required to be submitted to the banks for not only opening account but also for keeping the account operation. Additionally, similar documentation process is required in availing any sort of services from banking system.
Under this situation, if Trump administration’s new requirement of citizenship information is implemented, banking service will become nightmare for common people. Although the new stringent measure is aimed at targeting undocumented immigrants, yet all customers irrespective of legal and illegal will be the victim of providing additional documents and information for opening and maintaining bank account and receiving services from the banks. The way media has reported, the issue is being widely discussed and Senator’s social media posting suggest that banking service is going to get harder in America. #
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Nironjan Roy, CPA, CMA, CAMS
Certified Anti-money laundering Specialist and Banker
Toronto, Canada
Email: nironjankumar_roy@yahoo.com
