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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
Senate: MABS DP 4-3-0-0 | Third Read 16-12-2-0-0 |
SB1421: undocumented aliens; financial services
Sponsor: Senator Rogers, LD 7
Committee on Commerce
Overview
Establishes prohibitions for financial institutions, check cashers and business entities regarding the acceptance of specific licenses or identification cards from unauthorized aliens or undocumented immigrants.
History
The Arizona Department of Insurance and Financial Institutions (DIFI) ensures public confidence by protecting the interest of depositors, borrowers and consumers through the enforcement of state laws. DIFI has the authority to adopt rules, investigate consumer complaints related to financial services and enforce compliance requirements for financial institutions and business entities through verification and reporting protocols.
At the federal level, the Internal Revenue Service (IRS) administers and enforces federal tax laws. The IRS issues individual taxpayer identification numbers (ITINs) to individuals who are required to have a U.S. taxpayer identification number but are ineligible for a Social Security Number (SSN). Federal regulations clarify that an ITIN is a tax processing number issued solely for federal tax reporting and compliance. An ITIN does not refer to a SSN or an account number for use in employment for wages (26 C.F.R § 301.6109-1).
A remittance transfer is the transfer of funds requested by a sender located in any state to a designated recipient that is initiated by a remittance transfer provider, whether or not the sender holds an account with the remittance transfer provider or whether or not the remittance transfer is also an electronic fund transfer (15 U.S.C. § 1693o-1).
Provisions
Forms of Identification
1. Prohibits a financial institution from accepting, as a form of identification for opening any account, safe deposit box or receiving services, a license or identification card that is:
a. issued exclusively to an unauthorized alien or undocumented immigrant; or
b. substantially similar to a license or identification card issued to a U.S. citizen or resident or an individual who is lawfully present in the U. S. but that has markings indicating that the license or card holder did not present proof of lawful presence in the U.S. (Sec. 1)
2. Deems making a loan to an individual, for loan applications that allow the use of an ITIN as a method of identifying the loan recipient, unlawful. (Sec. 2)
3. Allows a lender, after executing a lawful loan agreement, to request the borrower's ITIN if the borrower is ineligible to receive an SSN. (Sec. 2)
4. Prohibits a check casher from accepting, as a form of identification, a license or identification card that is:
a. issued exclusively to an unauthorized alien or undocumented immigrant; or
b. substantially similar to a license or identification card issued to a U.S. citizen or resident or an individual who is lawfully present in the U.S. but that has markings indicating that the license or card holder did not present proof of lawful presence in the U.S. (Sec. 3)
Foreign Remittances of Monies
5. Prescribes requirements for business entities authorized to conduct foreign remittance transfers from Arizona to another country on behalf on an individual, including:
a. prohibiting the transfer of monies unless the individual provides documentary proof that the individual is not an unauthorized alien; and
b. requiring businesses to provide monthly confirmation to DIFI of individuals who provided the required documentation. (Sec. 4)
6. Directs DIFI to adopt rules for foreign remittance transfers, including specifying which forms of documentation are acceptable to verify an individual is not an unauthorized alien. (Sec. 4)
7. Authorizes DIFI to request records from a business entity at any time to verify the individual who requested the foreign remittance transfer was not an unauthorized alien. (Sec. 4)
8. Allows any person who in good faith believes a business entity is violating foreign remittance regulations to file a complaint with DIFI. (Sec. 4)
9. Mandates DIFI, on receipt of a valid complaint that is substantiated by evidence, to notify the business entity of the complaint and the substantiated evidence. (Sec. 4)
10. Requires the business entity to pay the assessed civil penalty. (Sec. 4)
11. Requires DIFI to:
a. conduct random quarterly audits of business entities, beginning July 1, 2027, to ensure compliance of foreign remittance regulations; and
b. impose a civil penalty against a business entity for violations equal to 25% of the total transfer amount, excluding any fees or charges. (Sec. 4)
12. Defines pertinent terms. (Sec.4)
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16. Initials PB/ZE SB 1421
17. 3/18/2026 Page 0 Commerce
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