Kansas Couple’s Account Frozen After They Didn’t Answer Citizenship Question. Is That Legal? | KCUR

Kansas Couple’s Account Frozen After They Didn’t Answer Citizenship Question. Is That Legal?

Sep 10, 2018

When Josh Collins first got the letter from Bank of America more than two months ago, he thought it was a scam.

The letter wasn’t on the glossy paper typical of what he’d seen during his two decades with the bank. And it asked him some unusual questions, like if he had international accounts.

“Then it asked if I was a citizen,” Josh said. “I was like, well, I don't know that they need to know this and I'm not sure that this is legit, so I’ll just hold onto it.”

Josh is a U.S. citizen, as is his wife, Jessica Salazar Collins, and they live in Roeland Park. He showed the letter to Jessica and she thought it looked funny, too, so they tossed it. Just a day later, Jessica was in a Jack in the Box drive-through with their kids.

“I was trying to buy a bag of tacos and my card was declined and I remember looking at the woman and I'm like, ‘No, read it again,’” Jessica said. “Because I thought: I've always had problems with my chip.”

The worker ran it again. It was declined again.

“Immediately, I pull my phone out — she probably thought I was a crazy woman — and I log into my Bank of America app and I'm showing her,” Jessica said. “‘Look, I have this much money in my account!’”

The Collins’ account had been frozen by Bank of America. They called the bank and confirmed their identity, waited and called again. Then Jessica got an email that said all of the bills she pays automatically online were cut off.

They called again and were told to go to a local Bank of America. The couple met with a teller who pulled up their account information.

“And first question she had is, ‘Are you a U.S. citizen?’” Josh said. “She turned her computer screen around so we could see the monitor and there was a little red flag at the bottom.”

They didn’t know it at the time, but the Collins had stumbled into a gray area of U.S. banking regulations. Citizenship is not required to open a U.S. bank account, said Stephanie Collins, no relation and a spokeswoman for the Office of the Comptroller of the Currency, part of the U.S. Treasury Department. But that’s not how many banks view it.

Christopher Feeney, a spokesman for Bank of America, wouldn’t comment on the Collins’ case specifically. But, he said the company has been asking about citizenship status for years as part of the maintaining of customer records required by federal law, such as the Bank Secrecy Act of 1970, which combats money laundering.

Bank of America restricts an account only after it doesn’t hear back from a customer after sending several notices seeking more information, such as online banking pop-ups, email, calls or letters, he said.

“This is neither new or unique to Bank of America,” Feeney wrote in an email. “These questions have been asked for many years (Nearly a decade!).”

The Collins were locked out of their account for more than 36 hours. Jessica was so angry she posted their predicament on Facebook, then others stepped forward to say it had happened to them. Local news media began covering it and the story took off.

U.S. Rep Emanuel Cleaver, a Missouri Democrat, is a member of the House Finance Committee and said he understands the requirements of federal law. But he doesn’t believe that those laws require asking about citizenship.

After meeting with Hispanic leaders in Kansas City, Cleaver asked for a hearing on the issue. Given the changes in U.S. immigration policy, the news created panic in minority communities, Cleaver said.

“I don't think that it's an issue that any person who believes in the diversity of America can ignore,” he said. “And the other thing is, it's not against the law for a non-American to have a banking account in the United States.”

That’s true. But since the terror attacks on 9/11, strict regulatory requirements have expanded and banks of all sizes must collect information about their customers, said Blair Bernstein, a spokesperson for the American Bankers Association.

“As a result, banks are required to verify the identities of all customers and to maintain updated and accurate customer information,” he wrote in an email. “Federal regulators routinely examine banks for compliance.”

Jessica and Josh Collins moved their money to Mainstreet Credit Union, which is based in Lenexa and has 12 local branches. They weren’t asked about their citizenship – though Mainstreet’s online application does. The couple is happy that there’s been a lot of publicity about their problem.

“I just feel there’s something deeper here, I mean, as a fourth-generation Latina,” Jessica said. “We have people who are coming to America to try to start a life and to create a better dream for their family. And we’re not going to allow them to get bank accounts?”

Bank of America says they are trying to ask the question in “culturally relevant and sensitive ways,” for example, by clerks speaking Spanish or other languages. As for all the attention garnered by the Collins’ problem, Feeney said the bank’s procedures haven’t changed, but the environment has.

Peggy Lowe is a KCUR reporter who also files for Marketplace. She’s on Twitter at @peggyllowe.