U.S. NEWS
08/30/2018 08:09 pm ET

Bank Of America Faces Backlash After Freezing Accounts Over Citizenship Questions

The bank says it asks account holders about citizenship in order to comply with the government's country-specific sanctions.

Bank of America is facing backlash over reports that the company has frozen customer accounts over questions about their citizenship status.

A report published Thursday by the Miami Herald profiles numerous Bank of America customers who say they have been locked out of their accounts after failing to answer questions about their citizenship or provide documentation deemed acceptable.

The bank says it asks account holders about their country of citizenship in order to comply with country-specific sanctions and routinely conducts outreach to ensure information is up to date. 

In one case the Herald described, Saeed Moshfegh, an Iranian doctoral student at the University of Miami, said he was denied access to his account after his local Bank of America branch refused to accept documentation he offered to demonstrate his status as a student.

“This bank doesn’t know how the immigration system works, so they didn’t accept my document,” Moshfegh told the Herald.

Dan Hernandez, a television writer of Cuban heritage, said the bank suspended his business account in December 2016 over suspicion he was doing business with Cuba. The issue was resolved after he sent a tweet to the bank’s social media account.

“It was extremely scary,” Hernandez told the Herald. “I knew I didn’t do anything wrong, but it puts doubt in your mind. A bank can crush your life for arbitrary reasons and never tell you why.”

It was extremely scary. I knew I didn’t do anything wrong, but it puts doubt in your mind. Dan Hernandez, Bank of America customer

 

The Kansas City Star reported on a similar case in July, when Kansan Josh Collins said he received an unusual-looking letter from Bank of America asking about his citizenship status. He ignored it, assuming it was spam, but later discovered his account was frozen.

In a statement on July 28, the bank said it “may periodically request information,” including country of citizenship and proof of U.S. residency, from customersA number of other major banks, including Wells Fargo and Citibank, ask customers questions about citizenship.

Bank of America unfroze Collins account when he presented his driver’s license at a local branch.

Beth Mills, a spokeswoman for the California Bankers Association, told the Star that federal law only requires that banks verify account holders’ name, date of birth, residential address and Social Security number.

But in an Aug. 23 report, Reuters detailed why many bank compliance officers see no way around asking customers about their country of citizenship, particularly in order to collect federally mandated information aimed at assessing potential risks associated with so-called “nonresident alien accounts.”

In a statement to HuffPost, bank spokeswoman Carla Molina said Bank of America asks about country of citizenship “in order to comply with laws and regulatory requirements, including those related to the U.S. Bank Secrecy Act or enforced by the Treasury Department’s Office of Foreign Assets Control.”

She added:

The regulations are not meant to determine immigration status. Like other banks, we ask for information about citizenship so that we can comply with country-specific sanctions as well as customer due diligence requirements imposed by the U.S. government. Citizenship status is not considered when it comes to establishing bank accounts and citizenship status of our customers is not shared with any other party. Like all globally active banks, our customers are citizens of many different countries. Over time, we ask all customers to verify their information is current. If we don’t hear back from a customer in response to our outreach, as a last resort, we may restrict the account until we can confirm it is in compliance with regulatory requirements. Our goal is to minimize customer inconvenience while ensuring we have strong controls in place to reduce the risk of financial crimes, and complying with the laws and regulations cited above.

The bank said it has used the same country of citizenship question for almost a decade.

But Paulina Gonzalez, executive director of the California Reinvestment Coalition, said banks questioning customers about their citizenship status feeds into “anti-immigrant sentiment” already running high in the wake of the 2016 presidential election.

The outcry over Bank of America’s citizenship question comes in the midst of the Trump administration’s crackdown on illegal immigration and a climate in which many immigrants in the U.S. feel increasingly vulnerable. 

U.S. Citizenship and Immigration Services, the government agency that oversees immigration applications, in June launched an office dedicated to identifying Americans suspected of using fake identities to obtain citizenship via naturalization.

In March, the U.S. Census Bureau announced it was adding a question about citizenship to the 2020 census. The move has been challenged in court over concerns that the question might dissuade immigrants from filling out the census, causing an incomplete count.

“First we hear that the Trump administration is adding the citizenship question to the 2020 Census, and now some banks are requiring this question from customers to maintain a bank account,” Gonzalez said in a statement. “Given the current political climate, it is no wonder that immigrant customers are wary of answering this question.” 

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