> A bank needs to be able to recheck every client's status any time the rules change (which happens on a weekly basis). If they don't hold adequate information about their clients, that would mean suspending their accounts until a new verifiable claim was provided.

Exactly. Anyone who has had to deal with the OFAC list (which in reality is every single business in the US) knows that the more information you collect up front, the less disruptive of a user experience you can guarantee (for most users).