Know Your American Customer Act
The Know Your American Customer Act would amend federal banking law to require insured depository institutions and insured credit unions to verify the citizenship or lawful immigration status of certain individuals before opening or maintaining accounts. The bill defines covered individuals broadly to include new account applicants, some existing account holders whose eligibility was established through temporary authorization documents, and individuals exercising substantial control over a legal entity seeking an account. It sets out a list of acceptable documents for proving U.S. citizenship or lawful presence, including REAL ID-compliant identification, passports, birth certificates, naturalization and citizenship certificates, permanent resident cards, and certain immigration documents.
For individuals with temporary authorized stay, the bill requires a certification of the expiration date and basis for stay, then allows a 30-day grace period after the stay expires followed by a 60-day restricted period if updated proof is not provided. During that restricted period, deposits may continue but withdrawals, transfers, debit and credit card use, and wire transfers would be prohibited; accounts would then be closed if documentation is not updated. The bill also directs Treasury, through FinCEN, to issue interim guidance within 30 days and final regulations within 90 days, and it expressly preempts conflicting state laws on verification of lawful residency by financial institutions. In addition, it adds criminal penalties for certain non-lawfully present individuals who open or maintain active accounts, while carving out exceptions for recent expirations of authorized stay and pending asylum applications.
The bill would significantly expand federal compliance obligations for banks and credit unions by creating a new citizenship/lawful-presence verification regime tied to account opening and ongoing account maintenance. It would also require institutions to freeze, restrict, or close accounts in specified circumstances, and it would authorize Treasury and FinCEN to enforce the new rules and issue implementing guidance and regulations on a rapid timeline. By expressly superseding state laws on verification of lawful residency, the bill would create a uniform federal standard and displace any more or less stringent state-level requirements in this area.
Because the bill was only introduced and referred to the House Committee on Financial Services, there is no recorded vote or committee transcript reflecting formal debate. Based on the text, the bill appears to be framed as a border/security and compliance measure, with an emphasis on preventing account access by individuals not lawfully present in the United States. The absence of recorded legislative discussion means there is no documented bipartisan or partisan sentiment in the available materials, but the proposal is likely to draw strong reactions because it directly affects banking access for immigrants and noncitizens.
The main points of contention are likely to be the bill’s treatment of immigrants and temporary visa holders, the burden it places on financial institutions, and the privacy/civil-liberties implications of requiring proof of citizenship or lawful presence for account access. Supporters would likely argue that the measure strengthens financial integrity and prevents misuse of the banking system, while opponents may argue it could exclude lawful residents, create account disruptions when immigration documents expire, and force banks into immigration-enforcement roles. The bill’s criminal penalties and federal preemption of state law are also likely to be controversial, especially among advocates for immigrant communities, consumer groups, and institutions concerned about compliance costs and operational complexity.