On May 19, 2026, President Donald Trump signed an executive order titled, “Restoring Integrity to America’s Financial System.” The order is designed to mitigate risks to the financial system “posed by the extension of credit or financial services to the inadmissible and removable alien population.”
The order stops short of requiring firms to verify each customer’s citizenship status – a controversial move that was reportedly under consideration as part of the administration’s immigration crackdown.
Nonetheless, the order requires the US Department of the Treasury and federal financial regulators[1] to examine those regulations that could be used to surface customer citizenship status, including through changes to regulations governing customer due diligence (CDD) and customer identification program (CIP) requirements for covered financial institutions, identification of risks to the financial system posed by “non-work authorized populations,” and guidance on managing potential credit risks posed by that population.
What the order requires
Treasury advisory on suspicious activity
Within 60 days of the order, the secretary of the Treasury Department is required to issue a formal advisory to financial institutions describing “red flags and typologies” associated with certain categories of suspicious activity, including:
- Patterns of payroll tax evasion by employers, including the failure to withhold or remit federal employment taxes for non-work authorized individuals.
- Attempts to hide the identity of ultimate beneficial owners or the true nature of payroll disbursements, such as through use of foreign identity documents, nominee accounts or shell companies.
- Use of unregistered money services businesses, third-party payment processors or peer-to-peer platforms to facilitate off-the-books wage payments to avoid Bank Secrecy Act (BSA) reporting thresholds or tax obligations.
- Patterns of repetitive cash withdrawals or deposits correlated with payroll cycles conducted outside of regulated payroll processing systems.
- Financial activity suggesting labor trafficking or forced labor.
- Use of an Individual Taxpayer Identification Number (ITIN) to obtain credit products or open deposit accounts where the applicant lacks verified lawful immigration status. Note that the order specifically flags ITIN use as a potential risk factor that may warrant enhanced due diligence.
BSA regulatory amendments: CDD and CIP requirements
Within 90 days, the secretary of the Treasury, in consultation with federal financial regulators, must propose changes to BSA regulations to strengthen risk-based CDD requirements for covered financial institutions. The changes should ensure that institutions collect and verify customer identity information to identify account owners and retain the authority, as warranted, to obtain additional information to resolve material compliance concerns, including information relevant to whether account holders possess lawful immigration status and employment authorization, as part of their CDD programs.
Within 180 days of the order, the secretary of the Treasury and federal financial regulators must also consider changes to enhance CIP requirements for covered financial institutions, with any changes expected to account for the risks foreign consular identification cards pose to the “integrity” of the US financial system.
Ability to repay and credit risk guidance
Focusing on what it describes as “structural credit risks,” the order also directs the Consumer Financial Protection Bureau (CFPB) to consider within 60 days whether to clarify that the risk of deportation and associated loss of wages are factors that could impact a non-work authorized borrower’s ability to repay credit under the standards set forth in Regulation Z – and that lenders may take such factors into account as part of a reasonable, good-faith underwriting determination. The order specifically notes that financial institutions should be aware of the risks associated with extending credit to the “inadmissible and removable alien population,” for example due to loss of wages following their removal.
Separately, each financial regulator must issue guidance regarding the management of the potential credit risks posed by the non-work authorized population.
We note that this is not the first push to consider such issues in credit determinations. Earlier this year, the CFPB and Department of Justice formally withdrew their October 2023 joint statement addressing creditors’ consideration of immigration status under the Equal Credit Opportunity Act and its implementing Regulation B. The agencies reminded industry that Regulation B allows creditors to consider immigration or citizenship status, as well as any additional information needed to secure repayment obligations, provided the creditor does not use that information to discriminate on a prohibited basis.
Looking forward
The “Restoring Integrity to America’s Financial System” order creates a rolling series of regulatory deadlines that will require significant engagement from financial institutions. Although the order does not currently impose new customer-facing requirements, the guidance and rulemaking it sets in motion could materially affect how institutions approach CDD, customer identification and consumer credit underwriting. Institutions that already maintain robust know-your-customer, CDD and enhanced due diligence programs will be better positioned to absorb any incremental requirements, but close monitoring of the implementation timeline will be essential for compliance planning.
The order comes on the same day as the White House’s release of a second executive order to promote the “integration of digital assets and innovative technology into traditional financial services and payment systems.” Under the order, federal financial regulators must review existing regulations and processes to identify barriers that may hinder fintechs from partnering with financial institutions or applying for bank charters and other licenses. Separately, the Federal Reserve Board must evaluate the legal framework governing access to Reserve Bank payment accounts and services for uninsured depository institutions and nonbank financial companies, including those dealing in digital assets, and submit a report with findings and recommendations to the president.
[1] The order refers to “Federal functional financial regulators,” which include the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and National Credit Union Administration.