The Trump Administration is evaluating a proposal that would require banks to verify the citizenship status of both new and existing account holders. Dan Goldbeck, Director of Regulatory Policy at the American Action Forum, has analyzed the potential administrative costs associated with such a policy by referencing data from similar verification programs and applying it to the Financial Crimes Enforcement Network’s (FinCEN) current Customer Identification Program.
According to Goldbeck’s analysis, implementing citizenship checks for new accounts could result in an additional 33.1 to 73.3 million paperwork hours for banks. The estimated financial impact ranges from $2.6 billion to $5.6 billion in extra administrative costs.
Goldbeck notes that these figures only reflect the burden of verifying new accounts. He states that determining the cost for existing account holders is more challenging due to limited details about how such a process would be carried out. However, even under conservative assumptions, extending verification requirements to all current customers would add millions more hours and billions of dollars in compliance expenses.
“To estimate potential costs of the requirement, this analysis applies cost estimates from similar verification programs across other agencies to the Financial Crimes Enforcement Network’s (FinCEN) current Customer Identification Program (CIP). It finds that checking the citizenship status of new accounts could add anywhere from 33.1–73.3 million additional paperwork hours and $2.6–$5.6 billion in additional costs,” Goldbeck said.
He added: “Verifying new accounts is the tip of the iceberg; the lack of details makes it difficult to estimate the costs of verifying existing accountholders, but even under the most conservative of assumptions it would add millions of hours and billions of dollars in administrative costs.”
