Know Your American Customer Act
- Bill Number
- S. 4206
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Immigration
- Status
- Introduced
- Latest Action
- 2026-03-25: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-06-18T20:42:08Z
AI-Generated Summary
Purpose
The Know Your American Customer Act (S. 4206) aims to prevent individuals who are not lawfully present in the U.S. from opening or maintaining bank accounts at insured banks and credit unions by requiring proof of U.S. citizenship or legal immigration status.
Key Provisions
- Covered Institutions and Individuals:
- Applies to insured banks (FDIC-insured depository institutions) and insured credit unions.
- Targets "covered individuals": natural persons opening accounts, certain existing account holders (opened 90+ days after enactment if based on temporary status), or beneficial owners of legal entities opening accounts.
- Verification Requirements (effective 90 days after enactment):
- Must present documents proving lawful presence (U.S. citizen/national or authorized alien whose stay has not expired), such as REAL ID-compliant driver's license, U.S. passport, birth certificate, green card, or valid foreign passport with I-94 form.
- For temporary stays (e.g., visas): Provide certification of expiration date; post-expiration, 30 days full access, then 60 days restricted (deposits allowed, withdrawals/transfers prohibited), followed by account closure if no update.
- Joint holders or authorized signers added later must also verify.
- Account Actions:
- Freeze or close accounts for those not lawfully present.
- Procedures for handling funds in frozen/closed accounts (e.g., redirect payments).
- Enforcement and Penalties:
- Treasury (via FinCEN) enforces; coordinates with National Credit Union Administration for credit unions.
- Civil penalties for institutions, with safe harbors for good-faith efforts or reliance on listed documents.
- Criminal penalties (up to $1M fine, 1 year prison) for unlawfully present individuals maintaining "active" accounts (exemptions for recent stay expirations or pending asylum applications); also applies to using legal entities to evade.
- Rulemaking and Exemptions:
- Interim guidance within 30 days, final rules within 90 days.
- Exempts foreign accounts, nonresident aliens not in U.S., and certain international banking.
- Preempts conflicting state laws.
Significant Changes to Existing Law
- Amends Bank Secrecy Act (31 U.S.C. § 5318) by adding verification mandates tied to immigration status, expanding beyond current anti-money laundering "know your customer" rules.
- Adds to criminal penalties section (31 U.S.C. § 5322), introducing new fines/imprisonment specifically for unlawfully present persons using accounts, while clarifying no criminal liability solely for verification failures.
Potential Impacts
- Government Agencies: Increases workload for Treasury/FinCEN (rulemaking/enforcement), DHS (document standards), and NCUA; no direct international effects but clarifies exemptions for foreign flows.
- Citizens: Minimal; standard IDs suffice.
- Financial Institutions: Compliance costs for verification, account monitoring/closure; safe harbors mitigate risks.
- Non-Citizens/Immigrants: Limits banking access for those overstaying visas or unlawfully present, potentially disrupting finances during grace periods or asylum processes.
- General Public: May reduce illicit finance risks but could affect temporary workers/students.
Main Stakeholders Affected
- Financial Institutions: Banks and credit unions (compliance/enforcement burden).
- Individuals: U.S. citizens (unaffected), legal immigrants/temporary visa holders (time-limited access), undocumented or overstayed individuals (account denial/closure).
- Government: Treasury (FinCEN), DHS, NCUA.
- Legal Entities: Beneficial owners must verify personally.
Notable Legal, Constitutional, or Political Implications
- Preemption: Overrides state laws on residency verification, centralizing federal control.
- Immigration-Banking Link: Ties financial access to immigration enforcement, potentially raising due process concerns for account closures or equal protection challenges for non-citizens.
- Criminalization: New penalties for individuals could increase deportations via financial trails but include humanitarian exceptions (asylum/recent expirations).
- No New Data Collection Burden: Exempts interim guidance from Paperwork Reduction Act.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-03-25: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2026-03-25: Introduced in Senate
Bill Versions
- Know Your American Customer Act — issued 2026-03-25 — PDF (17 pages)