Dem
47
GOP
53
Donald Trump keeps thinking of new ways to control the population. His latest one is a plan to require banks to collect citizenship data on all their customers, with an eye on later denying noncitizens banking services, and maybe later than that rounding up noncitizens for deportation. Hey, get the banks to help out with tracking down and deporting noncitizens. Brilliant! Currently, it is perfectly legal for noncitizens who are in the country legally to have a bank account. Denying people access to banks makes it very hard to live in America these days. For example, many companies deposit their employees' wages and salaries directly in their bank accounts, with no provision for paying them in cash. Many service providers insist on a check or electronic payment. Of course, Trump and his people know this well.
As with voting, proving citizenship is not always easy. Half of all Americans do not have a passport and over 20 million citizens do not have any proof of citizenship. Not everyone has an original birth certificate. They or their parents may have lost it over the years.
The banks are not keen on being Trump's next law-enforcement agency. At the very least, there is a lot more paperwork involved in dealing with subpoenas for information. At the worst, there will surely be fines for making mistakes. Does a 17-year-old bank teller in Idaho really know what a 1962 Kentucky birth certificate looks like? If someone has bought a fake birth certificate on the Internet, is the bank liable if some teller accepts a fake?
Trump is planning to require the banks to collect this information by issuing an XO. That is so much easier than getting Congress to pass a law—which the Democrats would filibuster in the Senate. However, XOs are merely instructions to federal officials. They are not binding instructions to banks. The Treasury could try to issue a regulation requiring this information, but that would be instantly challenged in court as having nothing to do with solvency of the bank and other issues the Treasury can legitimately regulate.
This is not the administration's first attempt to weaponize something that was previously nonpolitical. For example, the IRS recently illegally shared information on immigrants with DHS. The U.S. "voluntary" tax system works because people trust the IRS to obey the law. If it stops doing that, a whole new approach will be needed. In many other countries, residents fill out a form listing their sources of income and send it to the government, which then, based on that information and information it already has, sends each resident a bill to be paid. In the U.S., fewer than 1% of tax returns are audited, so it basically works on the honor system.
The Treasury Department has a unit called FinCEN (the Financial Crimes Enforcement Network), which investigates money laundering and other financial crimes. It could be given new authority to also deal with noncitizens having bank accounts. However, it is unlikely the courts would accept this without an act of Congress authorizing it.
In January, FinCEN ordered banks in two Minnesota counties to report all foreign transactions above $3,000, much lower than the normal $10,000 cutoff. The banks were very unhappy with this and actually want the $10,000 limit to be raised because the number of transactions above $10,000 is huge (think about U.S. companies paying foreign suppliers for products they have ordered). For example, J.P. Morgan Chase alone processes 60 million foreign transactions worth $10 trillion to 200+ countries every day. Some (unknown) number of these have to be reported. Even if it is 0.1%, that is 60,000 per day or 20 million per year. And that is just one bank, albeit the biggest one. Adding more paperwork to the mix is not something FinCEN or the banks are looking for. The banks will fight such a new rule tooth and nail. (V)