undocumented aliens; financial services

Plain English Breakdown

The exact effective date of the bill has not been specified in the official source material.

Financial Services for Undocumented Aliens

This bill restricts financial institutions and check cashers from accepting certain forms of identification issued to unauthorized aliens and foreign remittance transfers unless proof of lawful presence is provided.

What This Bill Does

• Prohibits financial institutions in Arizona from using specific types of IDs for opening accounts or providing services.
• Bans check cashing businesses from accepting IDs that are not valid for U.S. residents or those without proof of legal status.
• Forbids loans to individuals who use an Individual Taxpayer Identification Number (ITIN) on loan applications.
• Requires foreign remittance transfer providers to confirm recipients' lawful presence in the United States before transferring funds.
• Establishes penalties and compliance audits for businesses that violate these rules.

Who It Names or Affects

• Financial institutions operating in Arizona
• Check cashing businesses in Arizona
• Individuals seeking loans or financial services with unauthorized IDs

Terms To Know

Unauthorized alien

A person who is unlawfully present in the United States.

Foreign remittance transfer

The transfer of funds from a sender in Arizona to a recipient outside the U.S.

Limits and Unknowns

• Does not specify how financial institutions will verify lawful presence.
• Effective date is pending and has not been set yet.
• Fiscal impact on the state General Fund is not anticipated.

Official Summary Text

SB1421 - 572R - Senate Fact Sheet

Assigned to
MABS���������������������������������������������������������������������������������������������������������������� FOR
COMMITTEE

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

FACT SHEET FOR
S.B. 1421

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

Current Bill Text

SB1421 - 572R - S Ver

Senate Engrossed

undocumented aliens;
financial services

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1421

AN
ACT

amending title 6, chapter 1, article 2,
Arizona Revised Statutes, by adding section 6-118; amending title 44, chapter
9, article 1, Arizona Revised Statutes, by adding section 44-1209; amending
section 44-1362, Arizona Revised Statutes; amending Title 44, Arizona
Revised Statutes, by adding chapter 42; relating to financial services.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Title 6, chapter 1, article 2,
Arizona Revised Statutes, is amended by adding section 6-118, to read:

START_STATUTE
6-118.

Prohibited forms of identification

A financial institution doing business in this
state may not accept any of the following as a form of identification for the
purposes of opening a deposit account, loan account or safe deposit box or
receiving any other services from that financial institution:

1. A license or identification card
issued exclusively to an unauthorized alien or undocumented immigrant.

2. A license or identification card
that is substantially the same as a license or identification card issued to a
United States citizen or resident or an individual who is lawfully present in
the United States but that has markings indicating that the license or
identification card holder did not present proof of the holder's lawful
presence in the United States.
END_STATUTE

Sec. 2. Title 44, chapter 9, article 1, Arizona
Revised Statutes, is amended by adding section 44-1209, to read:

START_STATUTE
44-1209.

Loans; forms of identification

It is unlawful for a loan to be made to an
individual in this state if the application for the loan allows the use of an
individual taxpayer identification number issued by the internal revenue
service as a method of identifying the loan recipient.� After execution of an
otherwise lawful and binding loan agreement, a lender may lawfully request the
borrower's individual taxpayer identification number if the borrower is not
eligible to receive a social security number under federal law.
END_STATUTE

Sec. 3. Section 44-1362, Arizona Revised
Statutes, is amended to read:

START_STATUTE
44-1362.

Check cashing; receipts; notices; government payment instruments;
enforcement

A. A check casher may charge a fee for cashing a
payment instrument, and the check casher shall give a receipt to the customer
for each transaction.

B. A check casher shall display in a conspicuous
location in the check casher's principal place of business and each branch
office a complete and legible notice that is in English and Spanish and that
includes both of the following:

1. A schedule of all fees for both of the following:

(a) Cashing each type of payment instrument.

(b) Issuing an identification card.

2. A list of any identification that is acceptable
in lieu of the identification card provided by the check casher.

C. A check casher shall not charge a fee that is
more than three
per cent

percent
of
the face amount of the payment instrument or
five dollars
$5
, whichever is more, for cashing any payment instrument
issued by an agency of the United States or of this state or any political
subdivision of the United States or of this state.

D. A check casher
who is
operating
within the office of a labor pool, or the owner or operator of a labor pool,
shall not charge a day laborer for cashing a check that is issued by the labor
pool.

E. A check casher may not accept the
following as a form of identification:

1. A license or identification card
issued exclusively to an unauthorized alien or undocumented immigrant.

2. A license or identification card
that is substantially the same as a license or identification card issued to a
United States citizen or resident or an individual who is lawfully present in
the United States but that has markings indicating that the license or
identification card holder did not present proof of the holder's lawful
presence in the United States.

E.
F.
Any
act or practice in violation of this article is an unlawful act or practice
under section 44-1522.� The attorney general may investigate and take
appropriate action as prescribed in chapter 10, article 7 of this title.
END_STATUTE

Sec. 4. Title 44, Arizona Revised Statutes, is
amended by adding chapter 42, to read:

CHAPTER
42

FOREIGN
REMITTANCES OF MONIES

ARTICLE
1. GENERAL PROVISIONS

START_STATUTE
44-8041.

Definitions

In this chapter, unless the context otherwise
requires:

1. "Department" means the
DEPARTMENT of insurance and financial institutions.

2. "Foreign remittance
transfer" means a remittance transfer as defined in the electronic fund
transfer act (P.L. 90-321; 92 Stat. 3728; 15 United States code section 1693
o
-1) to a recipient that is located in a country other than the
United States.

3. "unauthorized alien"
means a person who is unlawfully present in the United States as prescribed in
the immigration and nationality act (66 Stat. 163; 8 United States code section
1101).
END_STATUTE

START_STATUTE
44-8042.

Foreign remittance transfers; prohibition; rules

A. A business entity that is
authorized to conduct foreign remittance transfers from within this state to
any country outside of the united states on behalf of an individual:

1. May not transfer the monies unless
the individual provides documentary proof that the individual is not an
unauthorized alien.

2. Each month shall provide to the
DEPARTMENT confirmation of the individuals who provided the documentary proof
required by paragraph 1 of this subsection.

B. The DEPARTMENT shall adopt rules
to administer this section, including which forms of documentation are
acceptable to verify an individual is not an unauthorized alien.
END_STATUTE

START_STATUTE
44-8043.

Enforcement; compliance audits

A. The DEPARTMENT may at any time
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.

B. Any person who in good faith
believes that a business entity is violating this chapter may file a complaint
with the department.� On receipt of a valid complaint that is substantiated by
evidence, the DEPARTMENT shall notify the BUSINESS entity of the complaint and
the substantiated evidence, and the business entity shall pay the civil penalty
pursuant to section 44-8044.

C. Beginning July 1, 2027, the
DEPARTMENT shall conduct quarterly audits of BUSINESS entities at random to
ensure compliance with this chapter.
END_STATUTE

START_STATUTE
44-8044.

Violation; civil penalty

The department shall impose a civil penalty in
an amount equal to twenty-five percent of the dollar amount of the
foreign remittance transfer, excluding any fees or charges imposed by the
business entity, against A business entity that violates this chapter.
END_STATUTE