Know Your American Customer Act

Key Points

• Banks and credit unions would be required to verify the citizenship or legal status of anyone opening a new account. Customers must present specific documents such as a REAL ID compliant driver's license, U.S. passport, birth certificate, or naturalization certificate.
• People who are not lawfully present in the U.S. would be barred from opening or maintaining bank accounts. Financial institutions would be required to freeze or close accounts of anyone found to be ineligible.
• People with temporary legal status must certify when their authorized stay expires. After that date, they get 30 days of normal access, then 60 days where only deposits are allowed. If they don't provide updated proof of legal status, the bank must close their account.
• Undocumented individuals who open or maintain an active bank account could face fines up to $1 million and up to one year in prison. However, people with pending asylum applications and those whose authorized stay expired within the last 90 days are exempt from criminal penalties.
• The bill would override all state laws on the topic of verifying customers' legal residency at financial institutions. The Treasury Department, through FinCEN, would enforce these rules and must issue interim guidance within 30 days and final regulations within 90 days of enactment.
• Existing account holders at a bank are exempt from the new verification requirements when opening additional accounts at the same institution. The rules also do not apply to accounts held by nonresident aliens who are not physically in the U.S. or foreign entities.