House Democrat calls for hearing on banks' citizenship requirements

WASHINGTON — A Democratic lawmaker is calling for the House Financial Services Committee to hold a hearing to examine why some banks are requiring customers to prove their citizenship status.

Rep. Emanuel Cleaver, D-Mo., is asking the committee to call officials at the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network, as well several national banks, to testify on banks’ using the Bank Secrecy Act and the Patriot Act of 2001 as justification for seeking citizenship information.

Specifically, Cleaver said he is looking to find out what quantifiable measures banks put in place to ensure that the citizenship requirement isn’t causing a significant invasion of customers’ privacy.

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“I recently became aware of this after hearing reports of people in the area whose bank accounts had been frozen because they did not respond to an inquiry from the bank on their citizenship status,” Cleaver said in a press release. “They are interfering with the livelihood of citizens.”

He also wants to know if banks are voluntarily reporting noncitizen account holder information to U.S. Immigration and Customs Enforcement, or other immigration agencies, that haven’t requested the information as part of a criminal investigation.

“Although it is necessary to implement measures to combat and counteract financial crimes, it is also imperative to understand how this policy of requesting proof of citizenship will further safeguard our national security,” Cleaver said in a letter to the committee.

“The frustration and inconvenience of frozen bank accounts can damage consumers’ financial status" and lead to "missed mortgage and utility payments, unnecessary overdraft fees, and negative credit ratings,” Cleaver added.

Cleaver’s request comes after Bank of America faced heat earlier this month for asking customers to reveal their citizenship status.

Certain groups, particularly Latino communities, were concerned about the impact of the practice on certain legal permanent residents who need to go to banks to deposit weekly earnings.

At the time, a BofA spokesperson said that all banks are required to maintain complete and accurate records on all their customers.

A spokesperson for Fincen has previously said that banks generally must collect their customers’ names, dates of birth, addresses and tax identification numbers, and that foreign passport numbers can be collected in lieu of a tax ID number.

A spokesperson for the OCC said that “there is not a statutory or regulatory requirement for an individual to be a citizen to open a bank account” but that banks are required to maintain appropriate risk management programs based on their activities, which can vary depending on the products and services a bank provides.

The OCC spokesperson said that the agency works closely with oversight committees “to accommodate every hearing request and determine the appropriate witness for hearings considered.”

The office of House Financial Services Committee Chairman Jeb Hensarling, R-Texas, did not immediately respond to an inquiry about whether he will consider holding a hearing on the issue.

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Compliance AML Consumer banking OCC FinCEN Bank of America House Financial Services Committee
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