,,ii #aaith ,,congress #b;d ,session ,s4 #dbjf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #be1 #bjbf,mr4 ,cotton introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to amend title #ca1 ,united ,states ,code1 to require certain financial institutions to verify the citizenship and legal status of individuals1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,know ,your ,american ,customer ,act4 #b4 ,verification of citizenship and legal status ,section #ecah of title #ca1 ,united ,states ,code1 is amended by adding at the end the following3 7r7 ,verification of citizenship and legal status 7#a7 ,definitions ,in this subsection3 7,a7 ,covered individual ,the term covered individual means any natural person who-- 7i7 seeks to open an account at a covered institution2 7ii7 7,i7 who holds an account at a covered institution that was opened on or after the date that is #ij days after the date of enactment of this subsection2 and 7,,ii7 whose eligibility for such account was established through documentation of authorization to temporarily reside in the ,united ,states in compliance with paragraph 7#b77;,c72 or 7iii7 is identified as the individual exercising substantial control over a legal entity1 as described in section #eccf1 that seeks to open an account at a covered institution4 7,b7 ,covered institution ,the term covered institution means-- 7i7 an insured depository institution2 and 7ii7 an insured credit union4 7,c7 ,distributions or transfers ,the term distributions or transfers means any payment1 refund1 deposit1 or other funds that would otherwise be directed to an account that has been frozen or closed under this subsection4 7,d7 ,insured credit union ,the term insured credit union has the meaning given the term in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb74 7,e7 ,insured depository institution ,the term insured depository institution has the meaning given the term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7,f7 ,lawful presence2 lawfully present in the united states ,the terms lawful presence and lawfully present in the ,united ,states1 with respect to an individual1 mean that the individual is-- 7i7 a citizen or national of the ,united ,states2 or 7ii7 an alien-- 7,i7 who has been inspected and admitted or paroled into the ,united ,states under the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #aaja et seq472 and 7,,ii7 whose period of authorized stay has not expired4 7,g7 ,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 ,states1 as evidenced by a document issued by the ,department of ,homeland ,security1 including an ,arrival_/,departure ,record 7,form ,i-#id7 7or an equivalent document74 7#b7 ,eligibility to open and maintain an account 7,a7 ,in general ,except as provided in subparagraph 7,c71 a covered institution may not open or maintain an account for any covered individual who is not lawfully present in the ,united ,states4 7,b7 ,verification requirement 7i7 ,new accounts 7,i7 ,in general ,except as provided in clause 7ii71 beginning on and after the date that is #ij days after the date of enactment of this subjection1 a covered individual shall present #a of the following1 which may be an original or certified copy1 to open an account at a covered institution3 7aa7 ,a driver's license or identification card issued by a ,state that is compliant with section #bjb of the ,,real ,,id ,act of #bjje 7division ,b of ,public ,law #aji-ac2 #di ,u4,s4,c4 #cjcja note74 7bb7 ,a ,united ,states passport or passport card4 7cc7 ,a birth certificate issued by the vital records office of a ,state1 territory1 or the ,district of ,columbia4 7dd7 ,a ,certificate of ,naturalization 7,form ,n-#eej1 ,form ,n-#egj1 or ,form ,n-#egh74 7ee7 ,a ,certificate of ,citizenship 7,form ,n-#efj or ,form ,n-#efa74 7ff7 ,a ,consular ,report of ,birth ,abroad 7,form ,,fs-#bdj7 or ,certification of ,report of ,birth 7,form ,,ds-#acej74 7gg7 ,a ,permanent ,resident ,card 7,form ,i-#eea74 7hh7 ,a valid1 unexpired foreign passport with a valid ,arrival_/,departure ,record 7,form ,i-#id7 or nonimmigrant visa demonstrating lawful admission and lawful presence4 7ii7 ,a ,social ,security ,administration proof-of-earnings card or statement1 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 #bjb of the ,,real ,,id ,act of #bjje 7division ,b of ,public ,law #aji-ac2 #di ,u4,s4,c4 #cjcja note74 7jj7 ,a valid identification card issued by the ,department of ,defense to a member of the uniformed services or to a dependent of such a member4 7kk7 ,any other document determined by the ,secretary of ,homeland ,security1 by regulation1 to be sufficient evidence of ,united ,states citizenship or lawful presence4 7,,ii7 ,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 7,i7 shall be subject to the verification requirements of that subclause4 7ii7 ,exception ,clause 7i7 shall not apply to an individual who maintains an account1 before the date described in that clause1 at the same covered institution the individual seeks to open an account4 7,c7 ,individuals with limited period of authorized stay 7i7 ,documentation of authorized stay ,any covered individual whose period of authorized stay in the ,united ,states is temporary1 as of the date on which the individual opens an account at a covered institution1 shall provide the covered institution with a certification1 on a form prescribed by the ,secretary of the ,treasury1 that-- 7,i7 identifies the expiration date of such authorized stay2 7,,ii7 describes the basis for such stay2 and 7,,iii7 is modeled after the certification requirements applicable to nonresident aliens under chapter #c of the ,internal ,revenue ,code of #aihf4 7ii7 ,grace period and account closure 7,i7 ,in general ,except as provided in subclause 7,,iii71 beginning on the last day of the period of authorized stay of a covered individual described in clause 7i77,i71 the covered individual shall retain full access to the account for a period of #cj days1 after which1 if the covered individual has not provided updated documentation of lawful presence1 the covered institution shall restrict transactions involving the account of the covered individual for a period of #fj days in accordance with subclause 7,,ii74 7,,ii7 ,transaction limitations ,during the #fj-;day period described in subclause 7,i71 the covered institution shall-- 7aa7 permit incoming deposits1 direct deposits1 and other credits to the account2 and 7bb7 prohibit all withdrawals1 outgoing transfers1 debit or credit card transactions1 and wire transfers4 7,,iii7 ,full access ,if the covered individual provides updated documentation of lawful presence during the #cj-;day or #fj-;day period described in subclause 7,i7 in accordance with clause 7i71 the covered institution shall restore full access to the account of the covered individual4 7iii7 ,account closure ,if the covered individual does not provide updated documentation of lawful presence before the end of the #fj-;day restricted period described in clause 7ii77,i71 the covered institution shall close the account in accordance with regulations promulgated under paragraph 7#d74 7iv7 ,accounts opened by legal entities ,the requirements of this paragraph shall not apply to accounts opened by legal entities4 7#c7 ,frozen or closed account procedures 7,a7 ,in general ,except as provided in paragraph 7#b77;,c71 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 subsection4 7,b7 ,applicability ,any applicable provision of law 7including regulations7 regarding the closure of an account shall apply to an account frozen under this paragraph4 7#d7 ,penalty 7,a7 ,in general ,except as provided in subparagraph 7,b71 any covered institution that violates this subsection shall be subject to a civil penalty4 7,b7 ,safe harbors ,no covered institution may be subject a civil penalty for a violation of this subsection if the covered institution-- 7i7 makes a good-faith effort to comply with this subsection1 and the regulations promulgated under this subsection2 7ii7 accepts any document listed in subparagraph 7,b77i77,i7 and relies on such document1 including in any good-faith closure or freezing of an account under paragraph 7#c72 or 7iii7 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 issuance4 7#e7 ,enforcement 7,a7 ,in general ,except as provided in subparagraph 7,b71 the ,secretary of the ,treasury1 acting through the ,director of the ,financial ,crimes ,enforcement ,network1 shall enforce the provisions of this subsection4 7,b7 ,insured credit unions ,with respect to insured credit unions1 the ,secretary of the ,treasury shall coordinate enforcement with the ,national ,credit ,union ,administration4 7#f7 ,rulemaking 7,a7 ,interim guidance 7i7 ,in general ,not later than #cj days after the date of enactment of this subsection1 the ,secretary of the ,treasury shall issue interim guidance carrying out this subsection4 7ii7 ,force and effect ,the interim guidance issued under this subparagraph shall have the force and effect of a rule promulgated under section #eec of title #e until superseded by final regulations under subparagraph 7,b74 7iii7 ,inapplicability ,chapter #ce of title #dd shall not apply to any collection of information required under the interim guidance issued under this subparagraph4 7,b7 ,final regulations ,not later than #ij days after the date of enactment of this subsection1 the ,secretary of the ,treasury shall promulgate final regulations carrying out this subsection1 including-- 7i7 the procedures and timing for freezing and closing accounts2 7ii7 the notice requirements applicable to account holders2 7iii7 the handling of distributions or transfers directed to frozen or closed accounts1 including procedures for redirecting incoming payments2 and 7iv7 the disbursement or transfer of remaining balances to another financial institution or foreign financial institution designated by the individual4 7#g7 ,applicability ,nothing in this subsection shall apply to1 restrict1 or impose any additional verification requirements on-- 7,a7 accounts held by nonresident aliens 7as defined in section #ggja7;b77#a77;,b7 of the ,internal ,revenue ,code of #aihf7 who are not physically present in the ,united ,states2 7,b7 accounts maintained by foreign persons1 foreign corporations1 foreign governments1 or other foreign entities not resident or physically present in the ,united ,states2 7,c7 deposits or accounts at branches or agencies of foreign banks in the ,united ,states1 to the extent attributable to non-resident or foreign sources2 7,d7 any other foreign capital inflows1 correspondent accounts1 or international banking liabilities to foreign residents1 as reported under the ,treasury ,international ,capital system or similar frameworks4 7#h7 ,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 chartered1 licensed1 or operating in the ,united ,states4 4 #c4 ,limitation on criminal penalties ,section #ecbb of title #ca1 ,united ,states ,code1 is amended by adding at the end the following3 7f7 7#a7 ,in this subsection-- 7,a7 the term active account-- 7i7 means an account with which an individual may conduct transactions2 and 7ii7 does not include an account that has been restricted or frozen under section #ecah7r72 and 7,b7 the terms covered institution1 lawfully present1 and period of authorized stay have the meanings given the terms in section #ecah7r74 7#b7 7,a7 ,except as provided in subparagraph 7,b71 ,any individual who is not lawfully present in the ,united ,states1 or whose removal has been ordered under chapter #d of title ,,ii of the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #abba et seq471 and who opens or maintains an active account at a covered institution1 shall be fined not more than #a1jjj1jjj1 imprisoned for not more than #a year1 or both4 ,this paragraph does not apply to any individual whose period of authorized stay expired within the preceding #ij days1 or who has filed an application for asylum under section #bjh of the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #aaeh7 that has not been finally adjudicated4 7,b7 ,subparagraph 7,a7 shall not apply to any individual-- 7i7 whose period of authorized stay expired within the preceding #ij days2 or 7ii7 who has filed an application for asylum under section #bjh of the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #aaeh7 that has not been finally adjudicated4 7#c7 ,any individual who is not lawfully present in the ,united ,states1 or whose removal has been ordered under chapter #d of title ,,ii of the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #abba et seq471 and who opens or maintains an account at a covered institution through a legal entity1 or who directs another person to do so on the behalf of the individual1 shall be fined not more than #a1jjj1jjj1 imprisoned for not more than #a year1 or both4 7#d7 ,notwithstanding subsections 7a7 and 7b71 no person shall be subject to criminal penalties under this section solely for a violation of section #ecah7r74 7#e7 ,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 #ecah7r74 4