On May 19, 2026, President Trump issued an executive order calling for stricter due diligence requirements when financial institutions vet customer applications. The executive order requires banks and financial services companies to treat customers’ immigration status as a factor in evaluating potential financial risk. If you represent non-citizen clients seeking credit, mortgages, or basic banking services, this order will significantly constrain your ability to secure access within months.
What changed
The White House’s Executive Order 14406, signed on May 19, 2026, directs the secretary of the treasury, within 60 days, to issue a formal advisory to financial institutions regarding the risks associated with the exploitation of the United States financial system by non-work authorized populations and their employers. The advisory will describe red flags indicative of six categories of suspicious activity: patterns of payroll tax evasion; tactics designed to obfuscate the identity of ultimate beneficial account owners; off-the-books wage payments; patterns of repetitive, sub-threshold cash withdrawals or deposits that correlate with payroll cycles; financial activity indicative of labor trafficking or forced labor; and use of an individual taxpayer identification number (ITIN) to obtain credit products or open depository accounts where the applicant lacks verified lawful immigration status.
Within 90 days, the secretary of the Treasury, in consultation with federal financial regulators, must propose changes to BSA regulations to strengthen risk-based customer due diligence requirements for covered financial institutions, ensuring that institutions collect and verify customer identity information and retain the authority to obtain additional information to resolve material compliance concerns, including information relevant to whether account holders possess lawful immigration status and employment authorization.
Within 180 days of the order, the secretary of the Treasury and federal financial regulators must also consider changes to enhance customer identification program 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.
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.
Why it matters
The executive order could make it more difficult for employees who are not U.S. citizens to open bank accounts, obtain credit, and access other financial services. The order opens a regulatory and supervisory pathway to scrutinize non-citizen customers across the entire application lifecycle—from account opening through credit underwriting.
Three overlapping timelines create cascading pressure on financial institutions:
Treasury advisory (60 days). Financial institutions need not wait for the Treasury Advisory to begin operationalizing the Order’s priorities, as some of the underlying typologies and red flags are already described in published FinCEN materials, but the forthcoming Advisory will carry heightened supervisory significance, particularly in light of the proposed AML/CFT program rule’s requirement to incorporate AML/CFT priorities into institutional risk assessments. Once issued, this advisory will set the compliance expectation for your clients’ banks to flag ITIN-based accounts, payroll patterns, and structuring activity tied to non-work-authorized individuals.
BSA rule proposals (90 days). The order emphasizes that institutions should collect and verify sufficient information to reasonably identify nominal and beneficial owners and that, where other risk indicators are present, they should have the authority to obtain information relevant to an account holder’s lawful immigration status and work authorization, when that information is relevant to assessing fraud, identity misrepresentation, sanctions evasion, or other illicit activity. These proposed rules will likely reshape the landscape of what banks legally can ask during account opening and credit decisions.
CFPB guidance (60 days). In January 2026, the US Department of Justice and the CFPB withdrew their 2023 joint statement that considerations of an applicant’s immigration or citizenship status could violate the Equal Credit Opportunity Act and Regulation B; however, the EO direction to the CFPB to permit creditors to consider potential loss of wages due to potential deportation when evaluating applicants for credit and looming revisions to the due diligence requirements under the BSA potentially impose constraints on non-citizen borrowers.
The practical impact: non-citizen clients will face heightened scrutiny, delayed processing, or outright denial of routine financial services. Self-employed clients or those paid in cash will be especially vulnerable to “red flag” categorization.
Way forward
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Audit client finances now. Review which clients hold ITINs, receive cash or informal wage payments, or use money-transfer services. Begin discussions about regularizing income documentation and banking relationships before new guidance and rules close doors.
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Distinguish work-authorized from non-work-authorized status. The order does not blanketly bar all non-citizens—it targets those without work authorization. Ensure clients understand the difference between nonimmigrant (e.g., H-1B, L-1) and undocumented status; the former may face less friction.
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Prepare for documentation requests. While the order clearly pushes regulators to treat immigration status and work authorization as relevant risk factors, it appears to stop short of requiring financial institutions to verify every customer’s immigration status; instead, it reinforces a risk-based approach and calls for targeted regulatory and supervisory actions. Clients should expect banks to request work authorization proof, passport copies, or I-94 information if account or credit applications trigger risk thresholds.
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Monitor regulatory releases. The Treasury advisory (due ~July 2026), BSA proposals (due ~August 2026), and CFPB guidance (due ~July 2026) will shape enforcement and compliance. Subscribe to FinCEN alerts and Federal Register notices to track timelines and adapt advice.
Disclaimer
This article is provided for general informational purposes and does not constitute legal or financial advice. Fola Editorial is not a law firm or financial services provider. Immigration and banking law are complex and rapidly evolving; immigration policy can change without notice. You should consult with a licensed immigration attorney or financial advisor and verify all information against the primary executive order and any subsequent Treasury advisories, regulatory proposals, and CFPB guidance before making decisions for your clients or your own accounts.