WASHINGTON— Sen. Tom Cotton (R-AR) has introduced legislation that would bar immigrants in the country illegally from opening or maintaining accounts at U.S. financial institutions, including federally insured credit unions, according to Cotton’s office.
The measure, dubbed the Know Your American Customer Act, would require banks insured by the FDIC and credit unions insured by the NCUA to verify that new customers are U.S. citizens, lawful permanent residents or otherwise legally present in the country on a valid visa.
According to Cotton’s March 25 press release, the bill would make it a federal crime for a person in the country illegally to open or maintain an account at a covered institution, provided the institution made a “good faith effort” to verify documentation and comply with the law. Cotton’s office said existing customers would be grandfathered in, allowing them to keep current accounts and open new ones at institutions where they already have a relationship, a provision the office said is intended to avoid immediate disruption for banks and credit unions.
The proposal extends a campaign Cotton began last year. In October 2025, he wrote Treasury Secretary Scott Bessent urging a review of rules that allow undocumented immigrants to access U.S. financial services, arguing that some institutions accept foreign-issued identification documents without independently verifying immigration status. In announcing the new bill, Cotton said access to the U.S. banking system “is a privilege” and argued the legislation would prevent undocumented immigrants from using financial institutions to help remain in the country.