There’s another way to prevent illegal immigration: hit them in the pocketbook. Sen. Tom Cotton has introduced new legislation that would bar undocumented immigrants from accessing the American banking system, opening a fresh front in the broader national debate over immigration enforcement and financial regulation.
The proposal, titled the Know Your American Customer Act, would require banks and credit unions insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration to verify the legal status of anyone opening a new account. Under the measure, applicants would need to demonstrate that they are U.S. citizens, lawful permanent residents, or in the country legally on a valid visa—providing identification such as a driver’s license or passport alongside documentation of immigration status.
The legislation would not apply retroactively. Existing account holders would be allowed to keep their accounts and open additional ones at the same institution without undergoing new verification checks, according to reports. But going forward, the bill would make it a federal offense for undocumented immigrants to open or maintain accounts at covered institutions, provided those institutions made a good-faith effort to verify documentation.
Cotton’s proposal builds on concerns he raised in 2025, when he urged Treasury officials to revisit policies that allow undocumented immigrants to open accounts using foreign identification without confirming lawful presence. At the time, he argued that such practices risk undermining immigration enforcement and national sovereignty by enabling individuals to integrate into the financial system without legal status.
The bill also aligns with the broader immigration posture of President Donald Trump’s administration. A Treasury Department spokesman, responding to questions about the legislation, underscored that alignment.
Cotton has framed the legislation in similarly direct terms, arguing that access to the U.S. financial system should be conditioned on lawful presence.
“Access to the American banking system is a privilege that should only be reserved for those who respect our laws and sovereignty,” he explained.
He added that the bill is designed to prevent undocumented immigrants from using financial institutions in ways that facilitate continued residence in the country outside legal channels.
Supporters of the measure describe it as a targeted extension of existing financial compliance frameworks—similar in structure to anti-money laundering and customer verification rules already in place. By tying banking access to immigration status, they argue, the federal government could reinforce enforcement without creating entirely new bureaucratic systems.
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