Congressman Torres’ The Municipal IDs Acceptance Act Passes the Financial Services Committee

WASHINGTON DC – Today, Rep. Ritchie Torres’ (NY-15) The Municipal IDs Acceptance Act (H.R. 3968) passed the House Financial Services Committee. The bill would require federal financial regulators and the Financial Crime Enforcement Network (FinCEN) to update the guidance on the Customer Identification Program to affirmatively state that municipal IDs may be accepted as identification documentation.

In 2015, New York City launched its municipal ID program, IDNYC with the intention to assist the unbanked, undocumented immigrants, the homeless, and others who may not have the traditional forms of identification required to navigate public and private services. IDNYC has the potential to help bring many of the more than 350,000 unbanked households in New York City into the mainstream banking system.      

“This bill represents an attempt to provide legal clarity where none might sufficiently exist, and it constitutes a win-win,” said Rep. Torres. A win for unbanked and underbanked, and a win for financial institutions in search of regulatory certainty. The acceptance of municipal identification among the biggest banks has the potential to move millions of Americans from the margins to the mainstream of the financial system.” 

While more than a million New Yorkers have obtained an IDNYC, some of the biggest banks in the City still do not accept the card as a primary source of identification. This is despite the fact that the Federal Reserve, Treasury Department, and Office of the Comptroller of the Currency said informally that banks could use IDNYC to satisfy certain requirements of federal anti-money laundering laws. Many financial institutions remain hesitant to incorporate the municipal identification card into the Consumer Identification Programs, limiting access to banking for underserved populations.

“In my district nearly 22 percent of households are unbanked. This bill would lead to additional banking access to those who can comply with account-opening requirements and could benefit the more than two dozen cities and counties with municipal ID programs. My hope is that this effort also would encourage others to adopt municipal ID programs to help underserved populations in places like the Bronx and across the country.”

5.4 percent of U.S. households (or approximately 7.1 million households) were unbanked in 2019 – meaning that no member of the household had a checking or savings account, according to the FDIC. This crisis falls disproportionately on low-income communities of color. 12.2% of Hispanic households, 13.8% of Black households, and 16.3% of American Indian/Alaska Native households lacked access to a mainstream checking account – compared with 2.5% of white households. 

According to a recent report by Financial Health Network and published by Brookings Institution, those who received stimulus checks from the CARES Act paid an estimated $66 million in check cashing fees. A single person may have paid up to $60 to access the $1,200 stimulus check through a check casher, while a married couple with three children who received $3,900 ($2,400 for the couple plus $500 per child) could have paid as much as $195, according to the report.

“It is expensive to be unbanked. We must break down the barriers that keep the unbanked out of the financial mainstream, perpetuating cycles of poverty,” said Rep. Torres. “I am proud to work with my colleagues on the House Financial Services Committee to close the gap in access to banking.”