{"id":55361,"date":"2018-08-18T02:09:46","date_gmt":"2018-08-18T09:09:46","guid":{"rendered":"http:\/\/siliconeer.com\/current\/?p=55361"},"modified":"2018-08-18T02:09:46","modified_gmt":"2018-08-18T09:09:46","slug":"should-banks-be-raising-the-citizenship-question","status":"publish","type":"post","link":"https:\/\/siliconeer.com\/current\/should-banks-be-raising-the-citizenship-question\/","title":{"rendered":"Should Banks Be Raising the Citizenship Question?"},"content":{"rendered":"

File photo of a Bank of America branch in the Financial District in Chicago, Illinois. (Scott Olson\/Getty Images)<\/em><\/p>\n

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Candidate Donald Trump rode his anti-immigrant rhetoric straight to the White House. Since then, he\u2019s banned people from heavily Muslim-populated countries, taken children from their parents upon arrival at the Mexico border, is attempting to make citizenship status a question on the 2020 Census, and one hot day in late July, blocked a fourth-generation American mom from buying her kids tacos at her local swimming pool in Roeland Park, Kan., writes Mark Hedin.<\/strong><\/p>\n

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Jessica Salazar Collins, a Bank of America customer for nearly 20 years, called BofA to ask why her debit card had been declined. Eventually, she learned that her account had been frozen, because her husband had not responded to a bank postcard inquiring about his citizenship status. Josh Collins was born in Wichita.<\/p>\n

Neither of the Collinses has ever left the United States except for a first-anniversary, belated honeymoon trip to Mexico in 2005. They had been Bank of America customers before that.<\/p>\n

In time \u2013 not as quickly as promised, and not in time to buy movie tickets for the family the next day \u00a0\ua7f7 the couple regained access to their earnings. But by early August, they\u2019d taken their banking to a local credit union. \u201cThis happened to the wrong people,\u201d Jessica Collins told Ethnic Media Services.<\/p>\n

BofA isn\u2019t alone in asking customers their citizenship status. Checking account applications from Chase, Citi, Wells Fargo, US Bank and even the credit union where the Collinses now do their banking, Mainstreet, all ask about it, and so do San Francisco\u2019s Fire and Golden1 credit unions.<\/p>\n

BofA declined to say why it targeted Josh Collins but not his wife, how often it performs such \u201croutine updates\u201d of client accounts, or how many postcards it sent out like the one the Collinses ultimately threw away in fear it was actually a scam, or how many more people experienced the bank\u2019s \u201clast resort,\u201d as spokesman Christopher Feeney described it, of having their accounts frozen for failing to respond.<\/p>\n

Banks and American Bankers Association spokeswoman Blair Bernstein generally explain the citizenship question as a part of their effort to combat money-laundering and terrorism funding, but in every case, the decision to ask customers about their citizenship status is the bank\u2019s own choice. Federal rules do not require it.<\/p>\n

\u201cWe have many customers who aren\u2019t U.S. citizens,\u201d Feeney told Ethnic Media Services. He also said the citizenship question is nothing new for them and probably has been in place at least a decade. The Collinses, he said, just got caught up in one of the bank\u2019s periodic updates of client information.<\/p>\n

Treasury Department regulations require that banks know customers\u2019 names, date of birth, Social Security numbers and addresses.<\/p>\n

\u201cBanks may be tightening up their due diligence,\u201d said lawyer Alma Angotti, who specializes in money laundering and terror funding enforcement for the consulting firm Navigant in Washington, D.C. She previously worked at the Securities and Exchange Commission and Treasury Department.<\/p>\n

\u201cThe current political climate has cast doubt on why financial institutions are doing this. There are lots of things banks will ask you that aren\u2019t required,\u201d she said.<\/p>\n

Bank of America spokesman Feeney described the government\u2019s various sanctions against other countries as the root of an array of regulations that led the bank to ask about citizenship. Knowledge of a customer\u2019s dual citizenship, for instance, Angotti said, might keep a bank from questioning why a customer is sending money out of the country.<\/p>\n

The more information a bank has up front, the fewer questions it will have as it routinely monitors customers\u2019 accounts and transactions.<\/p>\n

But for those without citizenship status, immigrant advocates say, any requirement that they divulge their circumstances is going to deter them from doing business with that bank.<\/p>\n

\u201cIt\u2019s something we\u2019ve been hearing about for a while,\u201d said Paulina Gonzalez of the California Reinvestment Coalition said. \u201cIt seems to correlate with \u2026 the anti-immigrant stance of the administration.<\/p>\n

\u201cThat\u2019s what\u2019s so concerning. People are afraid to sign papers,\u201d she said, referring to a 2017 survey done by some of the 300 members of the nonprofit California Reinvestment Coalition. Her 32-year-old organization aims to ensure financial institutions reinvest in their communities and \u201cdo no harm,\u201d she said. Some members in the course of their work will try to gather rudimentary information from the people they provide financial counseling and small business support.<\/p>\n

\u201cPeople are afraid to sign even for nonprofits in this political climate,\u201d she said.<\/p>\n

In San Francisco, the treasurer and tax collector\u2019s Office of Financial Empowerment reports that from 2011 through 2015, the percentage of \u201cunbanked\u201d city residents dropped from 5.9% to 2.1%.<\/p>\n

Although it also notes that 16.5% of city residents continue to rely on payday-loan and check-cashing companies rather than traditional banks, some of its success in getting people bank accounts may be due to its program BankOn San Francisco, which refers citizens to banks that have met its \u201cvery specific standards,\u201d program director Sean Kline told Ethnic Media Services. Among those standards is the requirement that they accept non-U.S. identification.<\/p>\n

Among its banking partners is the Self-Help Credit Union, formed in 2008. That institution requires knowing a person\u2019s citizenship status for loan applications, but not for checking accounts. Its website includes links to information on such topics as \u201cYou Don\u2019t Need to Be a Citizen to Have a US Bank Account\u201d (http:\/\/tinyurl.com\/noncitizenbanking<\/a>) and \u201cHow undocumented immigrants can get bank accounts\u201d (http:\/\/tinyurl.com\/whatdocumentswork<\/a>) as well as testimonials to the reasons why people should \ua7f7 to establish credit history, safety in not carrying cash, earn interest and the bill-paying convenience.<\/p>\n

It also lists Latino credit unions across the country (http:\/\/tinyurl.com\/Latinocreditunions<\/a>). Gonzalez is quoted on the laws protecting customers\u2019 personal information from governmental prying.<\/p>\n

Banking, Gonzalez said, \u201cis such a necessity of everyday life. Here we are, creating a situation where they\u2019re not going to have access to this important function, or they\u2019re going to freeze your account or make you feel like you\u2019re not welcome there.\u201d<\/p>\n

There\u2019s \u201ca lack of trust in financial institutions,\u201d she said. \u201cTo have to answer such a private question in this political climate … there are privacy rules in place. I know the bank can\u2019t turn that information over without a subpoena, but that doesn\u2019t mean that people aren\u2019t afraid that\u2019s going to happen.\u201d<\/p>\n

\u201cWe need this citizenship information to determine the eligibility and suitability of our products and to comply with the USA PATRIOT Act,\u201d reads Wells Fargo\u2019s online checking account application, in an explainer popup accompanying the online form\u2019s citizenship question. Feeney, also, had cited the 2001 Patriot Act and the 1970 Bank Secrecy Act and Treasury Department regulations, but ultimately could not cite specific requirements that banks collect clients\u2019 citizenship.<\/p>\n

Neither could Blair Bernstein, spokeswoman for the American Bankers Association, who cited the 1970 legislation, \u201cKnow Your Customer\u201d standards, and \u201cstrict regulatory requirements steadily expanded since 9\/11,\u201d along with regulators\u2019 routine examinations of banks for compliance.<\/p>\n","protected":false},"excerpt":{"rendered":"

File photo of a Bank of America branch in the Financial District in Chicago, Illinois. (Scott Olson\/Getty Images) Candidate Donald Trump rode his anti-immigrant rhetoric straight to the White House. Since then, he\u2019s banned people from heavily Muslim-populated countries, taken children from their parents upon arrival at the Mexico border, is attempting to make citizenship…<\/p>\n

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