Know Your American Customer Act
- Bill Number
- H.R. 8836
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Immigration
- Status
- Introduced
- Latest Action
- 2026-05-14: Referred to the House Committee on Financial Services.
- Last Updated
- 2026-06-18T20:42:15Z
AI-Generated Summary
Purpose of the legislation This bill amends title 31 of the United States Code to require certain banks and credit unions to verify the citizenship or legal immigration status of individuals before opening or maintaining accounts. It establishes the "Know Your American Customer Act" and aims to prevent accounts from being held by individuals without lawful presence in the United States.
Key provisions
- Definitions: Introduces terms such as "covered individual" (natural persons opening or controlling accounts, including those with temporary legal status) and "covered institution" (insured banks and credit unions). "Lawfully present" means U.S. citizens, nationals, or aliens with valid inspection, admission, or parole under immigration law whose authorized stay has not expired.
- Account eligibility and verification: Covered institutions may not open or maintain accounts for individuals not lawfully present. New account applicants must present one of several specified documents (such as REAL ID-compliant driver's licenses, U.S. passports, birth certificates, naturalization certificates, or valid foreign passports with I-94 forms). Authorized users added later are also subject to verification.
- Temporary stay rules: Individuals with limited authorized stay periods must submit a certification form detailing expiration dates. After expiration, they receive a 30-day full-access period, followed by a 60-day restriction period allowing only incoming deposits. Failure to provide updated proof results in account closure.
- Account freezing and closure: Institutions must freeze or close ineligible accounts, with existing closure rules applying. Procedures for handling incoming funds and transferring balances are to be set by regulation.
- Penalties and enforcement: Institutions face civil penalties for violations but receive safe harbors for good-faith compliance or reliance on listed documents. The Treasury Department (via FinCEN) enforces rules, coordinating with the National Credit Union Administration for credit unions.
- Rulemaking: Requires interim guidance within 30 days and final regulations within 90 days of enactment, covering procedures, notices, and fund handling.
- Exemptions: Does not apply to nonresident aliens abroad, foreign entities, or certain international banking activities. It supersedes conflicting state laws on residency verification.
- Criminal provisions: Adds penalties (fines up to $1,000,000 and up to 1 year imprisonment) for individuals not lawfully present who open or maintain active accounts, with exceptions for recent expirations or pending asylum claims. Separate penalties apply to using legal entities to circumvent rules. No criminal penalties apply solely for violating the verification requirements.
Significant changes to existing law
- Adds a new subsection (r) to 31 U.S.C. § 5318, expanding Bank Secrecy Act requirements beyond anti-money laundering to include citizenship and immigration status checks.
- Amends 31 U.S.C. § 5322 to introduce specific criminal liability for unauthorized individuals accessing banking services, while clarifying that violations of the new verification rules alone do not trigger criminal penalties.
- Creates a federal override of state laws on financial institution verification practices.
Potential impacts
- Government agencies: Increases oversight duties for the Treasury Department, FinCEN, and the National Credit Union Administration; may require coordination with immigration authorities for status verification.
- Citizens and residents: Streamlines account access for those with qualifying documents but could complicate processes for individuals lacking listed identification.
- Financial institutions: Requires new compliance systems, document review, and account management protocols, with potential costs for training and technology.
- Individuals without lawful presence: Restricts or eliminates access to banking services, leading to account closures or freezes.
- International relations: Exempts foreign accounts and nonresident activities, minimizing effects on cross-border banking.
Main stakeholders affected
- Insured depository institutions and credit unions.
- U.S. citizens, lawful permanent residents, and individuals with temporary legal status.
- Individuals without lawful presence or with expired authorizations.
- Legal entities opening accounts (partially exempt).
- Federal agencies including the Department of the Treasury, Financial Crimes Enforcement Network, and National Credit Union Administration.
Notable legal, constitutional, or political implications
- Establishes a federal preemption over state banking and residency verification laws.
- Introduces administrative processes for account restrictions with defined grace periods and notice requirements to be detailed in regulations.
- Creates new criminal liability tied to immigration status in the context of financial services, while protecting institutions and others from penalties based solely on the verification rules.
- Requires regulatory development to address due process elements such as fund handling during closures.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-05-14: Referred to the House Committee on Financial Services.
- 2026-05-14: Introduced in House
- 2026-05-14: Introduced in House
Bill Versions
- Know Your American Customer Act — issued 2026-05-14 — PDF (17 pages)