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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
undocumented aliens; financial services
Purpose
Prohibits a financial institution or check casher from accepting forms of identification issued to unauthorized or undocumented persons and foreign remittance transfers from being made to unauthorized aliens and prescribes requirements for compliance and enforcement.
Background
The
Department of Insurance and Financial Institutions (DIFI) licenses and
authorizes the transaction of insurance business by insurers, producers and
other enterprises and regulates
state-chartered financial entities, including consumer lenders, debt management
companies, escrow agents, advance fee loan brokers and sales finance companies.
The Deputy Director of DIFI (Deputy Director) has the authority and
responsibility for the discharge of all duties of the Financial Institutions
Division (A.R.S. Title 6
and A.R.S.
§ 20-101).
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).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits a check casher from accepting the following as a form of identification:
a) a license or identification card issued exclusively to an unauthorized alien or undocumented immigrant; or
b) a license or identification card that is substantially the same as a license or identification card issued to a U.S. citizen or resident or an individual who is lawfully present in the United States but that has markings indicating that the card holder did not present proof of lawful presence in the United States.
2. Prohibits a financial institution doing business in Arizona from accepting the following as a form of identification to a deposit or loan account or safe deposit box or to receive any other services from that institution:
a) a license or identification card issued exclusively to an unauthorized alien or undocumented immigrant; or
b) a license or identification card that is substantially the same as a license or identification card issued to a U.S. citizen or resident or an individual who is lawfully present in the United States but that has markings indicating that the card holder did not present proof of lawful presence in the United States.
3. Prohibits a loan from being made to an individual in Arizona if the loan application allows the use of an individual taxpayer identification number issued by the U.S. Internal Revenue Service as a method of identifying the loan recipient.
4. Allows, after execution of an otherwise lawful loan agreement, a lender to lawfully request the borrower's individual taxpayer identification number if the borrower is not eligible to receive a social security number under federal law after the execution of a lawful and binding loan agreement.
5. Stipulates that a business entity that is authorized to conduct foreign remittance transfers from within Arizona to any country outside of the United States on behalf of an individual:
a) may not transfer the monies unless the individual provides documentary proof that the individual is not an unauthorized alien; and
b) each month must provide the business entity provide to DIFI confirmation of the individuals who provided the required documentary proof.
6. Requires DIFI to adopt rules to administer foreign remittance transfers, including which forms of documentation are acceptable to verify an individual is not an unauthorized alien.
7. Allows, at any time, DIFI to request a business entity to provide records of documentation that were used to verify that the individual who requested the foreign remittance transfer was not an unauthorized alien.
8. Requires DIFI to impose a civil penalty in an amount equal to 25 percent of the dollar amount of the foreign remittance transfer, excluding any fees or charges imposed by the business entity, against a business entity in violation of the prohibition.
9. Allows any person who in good faith believes that a business entity is in violation of the prescribed prohibition to file a complaint with DIFI.
10. Requires on receipt of a valid complaint that is substantiated by evidence, DIFI to notify a business entity of a valid complaint and evidence.
11. Requires a business entity in violation to pay the civil penalty.
12. Requires, beginning July 1, 2027, DIFI to conduct quarterly audits of business entities by DIFI at random to ensure compliance.
13. Defines a foreign remittance transfer as a remittance transfer to a recipient that is located in a country other than the United States.
14. Defines an unauthorized alien as a person who is unlawfully present in the United States.
15. Defines terms.
16. Makes technical and conforming changes.
17. Becomes effective on the general effective date.
Prepared by Senate Research
February 5, 2026
KJA/KM/ci