Together with the continuing wave of misinformation surrounding deportations, the media and Twitter mobs at the moment are spreading yet one more delusion: that U.S. banks are closing immigrant financial institution accounts or shutting down accounts just because the holders are suspected of being non-citizens. As soon as once more, these claims are both a gross misrepresentation of the reality, or outright lies. You possibly can determine for your self after studying the information.
Underneath U.S. legislation, non-citizens are legally permitted to carry financial institution accounts. Monetary establishments, routinely provide accounts to foreigners, supplied they’ll confirm identification and authorized standing by way of paperwork corresponding to a passport, visa, or a taxpayer identification quantity. Usually, which means a Social Safety Quantity (SSN) or an Particular person Taxpayer Identification Quantity (ITIN) is required.
An ITIN is a nine-digit quantity issued by the IRS for tax submitting functions when the person is ineligible for an SSN. Many momentary visa holders, corresponding to worldwide college students or international staff, obtain ITINs which are legitimate at some point of their authorized keep. Nonetheless, there are a number of eventualities through which a checking account related to an ITIN could possibly be briefly frozen as a result of compliance points, not discrimination.
For instance, an ITIN routinely expires if it hasn’t been used on a tax return for 3 consecutive years. Adjustments in immigration standing may additionally have an effect on whether or not the particular person continues to be eligible for an ITIN or required to acquire an SSN as an alternative.
If an individual extends their visa, their present ITIN often stays legitimate, supplied it hasn’t expired as a result of non-use or IRS deactivation. Nonetheless, it’s nonetheless the account holder’s accountability to inform the financial institution of the extension and to supply up to date documentation to forestall any compliance interruptions.
When an immigrant’s authorized standing modifications they usually turn out to be eligible for a Social Safety Quantity, they’re required to cease utilizing their ITIN. The brand new SSN is a very completely different quantity, and the IRS have to be notified in order that the ITIN report may be merged with the SSN. Monetary establishments should additionally be told of the change.
If the financial institution continues to carry the outdated ITIN on file whereas the person is now submitting taxes or receiving employment earnings below an SSN, this could set off an inconsistency. In such instances, the financial institution might flag the account and freeze entry till the client offers proof of the brand new SSN. As soon as verified, the financial institution will replace its information and use the SSN because the official taxpayer ID, restoring entry to the account. This course of ensures compliance with federal Know Your Buyer (KYC) and Anti-Cash Laundering (AML) rules.
Adjustments in visa class, corresponding to switching from an F-1 scholar visa to an H-1B work visa, also can immediate banks to request up to date documentation. If the client fails to reply, the account could also be frozen briefly till the financial institution is ready to verify the up to date authorized standing. Likewise, if a visa expires and the financial institution has not acquired up to date proof of continued residency, it might limit entry till the state of affairs is resolved.
Monetary establishments are required by legislation to conduct common critiques of buyer documentation. If an account holder fails to answer a request for up to date ID, visa standing, or taxpayer data, the financial institution might freeze the account as a precautionary measure. Moreover, if there are inconsistencies between the taxpayer ID on file and the one being utilized in employment information or tax filings, this could elevate crimson flags below AML protocols. Once more, these freezes are lifted as soon as the documentation is clarified.
Along with normal KYC and AML rules, banks should additionally adjust to Workplace of International Property Management (OFAC) rules, which prohibit monetary transactions involving sure sanctioned people, entities, or nations. In consequence, clients who have been born in nations at the moment below U.S. sanctions might face extra scrutiny, even when they’re now U.S. residents. These critiques will not be about immigration standing however about authorized obligations tied to international coverage.
Nations that will fall into this high-risk class embody Cuba, Venezuela, Nicaragua, Iran, North Korea, Russia, Syria, and several other others going through U.S. sanctions or focused monetary measures. Banks have defined that in some instances, momentary restrictions are utilized solely as a result of a shopper’s background might require enhanced verification below OFAC pointers. These rules are binding, and failing to comply with them would expose the financial institution to critical federal penalties.
In early 2025, the Workplace of the Comptroller of the Forex (OCC) issued a cease-and-desist order in opposition to Financial institution of America for deficiencies in its compliance with the Financial institution Secrecy Act and AML necessities. Though this enforcement motion didn’t particularly goal immigrant accounts, it did immediate the financial institution to undertake stricter protocols in verifying buyer data, which can clarify a rise in requests for up to date documentation.
Consequently, Financial institution of America grew to become one of many major targets of social media outrage and media accusations, with claims circulating that the financial institution was freezing accounts belonging to immigrants or people suspected of being non-citizens.
In the meantime, misinformation has been circulating on social media, falsely claiming that the federal authorities is freezing accounts just because they’re opened with ITINs. That is solely unfaithful. Organizations like Enlace Latino NC have publicly debunked these viral claims, confirming that there isn’t any federal directive ordering the closure of immigrant financial institution accounts. ITINs stay a legit type of taxpayer identification for people ineligible for SSNs, and lots of banks, Financial institution of America included, proceed to simply accept them.
The underside line is straightforward: banks will not be concentrating on immigrants. They’re complying with federal guidelines that apply to all clients. The panic being stirred on social media relies on misinterpretation or outright dishonesty.
