Verification of citizenship and legal status

Section 5318 of title 31, United States Code, is amended by adding at the end the following:

(r)

Verification of citizenship and legal status

(1)

Definitions

In this subsection:(A)

Covered individual

The term covered individual means any natural person who—(i)seeks to open an account at a covered institution;(ii)(I)who holds an account at a covered institution that was opened on or after the date that is 90 days after the date of enactment of this subsection; and(II)whose eligibility for such account was established through documentation of authorization to temporarily reside in the United States in compliance with paragraph (2)(C); or(iii)is identified as the individual exercising substantial control over a legal entity, as described in section 5336, that seeks to open an account at a covered institution.(B)

Covered institution

The term covered institution means—(i)an insured depository institution; and(ii)an insured credit union.(C)

Distributions or transfers

The term distributions or transfers means any payment, refund, deposit, or other funds that would otherwise be directed to an account that has been frozen or closed under this subsection.(D)

Insured credit union

The term insured credit union has the meaning given the term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).(E)

Insured depository institution

The term insured depository institution has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).(F)

Lawful presence; lawfully present in the united states

The terms lawful presence and lawfully present in the United States, with respect to an individual, mean that the individual is—(i)a citizen or national of the United States; or(ii)an alien—(I)who has been inspected and admitted or paroled into the United States under the Immigration and Nationality Act (8 U.S.C. 1101 et seq.); and(II)whose period of authorized stay has not expired.(G)

Period of authorized stay

The term period of authorized stay means the period during which an alien is authorized by the Secretary of Homeland Security to be present in the United States, as evidenced by a document issued by the Department of Homeland Security, including an Arrival/Departure Record (Form I–94) (or an equivalent document).(2)

Eligibility to open and maintain an account

(A)

In general

Except as provided in subparagraph (C), a covered institution may not open or maintain an account for any covered individual who is not lawfully present in the United States.(B)

Verification requirement

(i)

New accounts

(I)

In general

Except as provided in clause (ii), beginning on and after the date that is 90 days after the date of enactment of this subjection, a covered individual shall present 1 of the following, which may be an original or certified copy, to open an account at a covered institution:(aa)A driver’s license or identification card issued by a State that is compliant with section 202 of the REAL ID Act of 2005 (division B of Public Law 109–13; 49 U.S.C. 30301 note).(bb)A United States passport or passport card.(cc)A birth certificate issued by the vital records office of a State, territory, or the District of Columbia.(dd)A Certificate of Naturalization (Form N–550, Form N–570, or Form N–578).(ee)A Certificate of Citizenship (Form N–560 or Form N–561).(ff)A Consular Report of Birth Abroad (Form FS–240) or Certification of Report of Birth (Form DS–1350).(gg)A Permanent Resident Card (Form I–551).(hh)A valid, unexpired foreign passport with a valid Arrival/Departure Record (Form I–94) or nonimmigrant visa demonstrating lawful admission and lawful presence.(ii)A Social Security Administration proof-of-earnings card or statement, presented with a valid driver’s license or identification card issued by a State regardless of whether such license or card was issued in accordance with section 202 of the REAL ID Act of 2005 (division B of Public Law 109–13; 49 U.S.C. 30301 note).(jj)A valid identification card issued by the Department of Defense to a member of the uniformed services or to a dependent of such a member.(kk)Any other document determined by the Secretary of Homeland Security, by regulation, to be sufficient evidence of United States citizenship or lawful presence.(II)

Authorized users

Any individual who does not maintain an account at the covered institution and who is added as a joint holder or authorized signer on an account at such institution after the date described in subclause (I) shall be subject to the verification requirements of that subclause.(ii)

Exception

Clause (i) shall not apply to an individual who maintains an account, before the date described in that clause, at the same covered institution the individual seeks to open an account.(C)

Individuals with limited period of authorized stay

(i)

Documentation of authorized stay

Any covered individual whose period of authorized stay in the United States is temporary, as of the date on which the individual opens an account at a covered institution, shall provide the covered institution with a certification, on a form prescribed by the Secretary of the Treasury, that—(I)identifies the expiration date of such authorized stay;(II)describes the basis for such stay; and(III)is modeled after the certification requirements applicable to nonresident aliens under chapter 3 of the Internal Revenue Code of 1986.(ii)

Grace period and account closure

(I)

In general

Except as provided in subclause (III), beginning on the last day of the period of authorized stay of a covered individual described in clause (i)(I), the covered individual shall retain full access to the account for a period of 30 days, after which, if the covered individual has not provided updated documentation of lawful presence, the covered institution shall restrict transactions involving the account of the covered individual for a period of 60 days in accordance with subclause (II).(II)

Transaction limitations

During the 60-day period described in subclause (I), the covered institution shall—(aa)permit incoming deposits, direct deposits, and other credits to the account; and(bb)prohibit all withdrawals, outgoing transfers, debit or credit card transactions, and wire transfers.(III)

Full access

If the covered individual provides updated documentation of lawful presence during the 30-day or 60-day period described in subclause (I) in accordance with clause (i), the covered institution shall restore full access to the account of the covered individual.(iii)

Account closure

If the covered individual does not provide updated documentation of lawful presence before the end of the 60-day restricted period described in clause (ii)(I), the covered institution shall close the account in accordance with regulations promulgated under paragraph (4).(iv)

Accounts opened by legal entities

The requirements of this paragraph shall not apply to accounts opened by legal entities.(3)

Frozen or closed account procedures

(A)

In general

Except as provided in paragraph (2)(C), a covered institution shall freeze or close the account of any covered individual who is not lawfully present in the United States or who is otherwise determined to be ineligible under this subsection.(B)

Applicability

Any applicable provision of law (including regulations) regarding the closure of an account shall apply to an account frozen under this paragraph.(4)

Penalty

(A)

In general

Except as provided in subparagraph (B), any covered institution that violates this subsection shall be subject to a civil penalty.(B)

Safe harbors

No covered institution may be subject a civil penalty for a violation of this subsection if the covered institution—(i)makes a good-faith effort to comply with this subsection, and the regulations promulgated under this subsection;(ii)accepts any document listed in subparagraph (B)(i)(I) and relies on such document, including in any good-faith closure or freezing of an account under paragraph (3); or(iii)accepts a driver’s license or identification card issued by a State that requires proof of lawful presence or United States citizenship as a condition for issuance.(5)

Enforcement

(A)

In general

Except as provided in subparagraph (B), the Secretary of the Treasury, acting through the Director of the Financial Crimes Enforcement Network, shall enforce the provisions of this subsection.(B)

Insured credit unions

With respect to insured credit unions, the Secretary of the Treasury shall coordinate enforcement with the National Credit Union Administration.(6)

Rulemaking

(A)

Interim guidance

(i)

In general

Not later than 30 days after the date of enactment of this subsection, the Secretary of the Treasury shall issue interim guidance carrying out this subsection.(ii)

Force and effect

The interim guidance issued under this subparagraph shall have the force and effect of a rule promulgated under section 553 of title 5 until superseded by final regulations under subparagraph (B).(iii)

Inapplicability

Chapter 35 of title 44 shall not apply to any collection of information required under the interim guidance issued under this subparagraph.(B)

Final regulations

Not later than 90 days after the date of enactment of this subsection, the Secretary of the Treasury shall promulgate final regulations carrying out this subsection, including—(i)the procedures and timing for freezing and closing accounts;(ii)the notice requirements applicable to account holders;(iii)the handling of distributions or transfers directed to frozen or closed accounts, including procedures for redirecting incoming payments; and(iv)the disbursement or transfer of remaining balances to another financial institution or foreign financial institution designated by the individual.(7)

Applicability

Nothing in this subsection shall apply to, restrict, or impose any additional verification requirements on—(A)accounts held by nonresident aliens (as defined in section 7701(b)(1)(B) of the Internal Revenue Code of 1986) who are not physically present in the United States;(B)accounts maintained by foreign persons, foreign corporations, foreign governments, or other foreign entities not resident or physically present in the United States;(C)deposits or accounts at branches or agencies of foreign banks in the United States, to the extent attributable to non-resident or foreign sources;(D)any other foreign capital inflows, correspondent accounts, or international banking liabilities to foreign residents, as reported under the Treasury International Capital system or similar frameworks.(8)

Effect on State law

The provisions of this section shall supersede any provisions of the law of any State relating to the verification of the lawful residency of covered individuals by financial institutions chartered, licensed, or operating in the United States.

Limitation on criminal penalties

Section 5322 of title 31, United States Code, is amended by adding at the end the following:

(f)(1)In this subsection—(A)the term active account—(i)means an account with which an individual may conduct transactions; and(ii)does not include an account that has been restricted or frozen under section 5318(r); and(B)the terms covered institution, lawfully present, and period of authorized stay have the meanings given the terms in section 5318(r).(2)(A)Except as provided in subparagraph (B), Any individual who is not lawfully present in the United States, or whose removal has been ordered under chapter 4 of title II of the Immigration and Nationality Act (8 U.S.C. 1221 et seq.), and who opens or maintains an active account at a covered institution, shall be fined not more than $1,000,000, imprisoned for not more than 1 year, or both. This paragraph does not apply to any individual whose period of authorized stay expired within the preceding 90 days, or who has filed an application for asylum under section 208 of the Immigration and Nationality Act (8 U.S.C. 1158) that has not been finally adjudicated.(B)Subparagraph (A) shall not apply to any individual—(i)whose period of authorized stay expired within the preceding 90 days; or(ii)who has filed an application for asylum under section 208 of the Immigration and Nationality Act (8 U.S.C. 1158) that has not been finally adjudicated.(3)Any individual who is not lawfully present in the United States, or whose removal has been ordered under chapter 4 of title II of the Immigration and Nationality Act (8 U.S.C. 1221 et seq.), and who opens or maintains an account at a covered institution through a legal entity, or who directs another person to do so on the behalf of the individual, shall be fined not more than $1,000,000, imprisoned for not more than 1 year, or both.(4)Notwithstanding subsections (a) and (b), no person shall be subject to criminal penalties under this section solely for a violation of section 5318(r).(5)Nothing in this subsection shall be construed to limit criminal liability for any criminal violation of Federal law arising independently of a violation of section 5318(r).