Restoring Integrity to America's Financial System

[Federal Register Volume 91, Number 99 (Friday, May 22, 2026)]

[Presidential Documents]

[Pages 30479-30481]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2026-10400]

Presidential Documents

Federal Register / Vol. 91, No. 99 / Friday, May 22, 2026 /

Presidential Documents

[[Page 30479]]

Executive Order 14406 of May 19, 2026

Restoring Integrity to America's Financial System

By the authority vested in me as President by the

Constitution and the laws of the United States of

America, it is hereby ordered:

Section 1. Purpose. America's financial institutions

serve a critical role in safeguarding the American

people against financial fraud and abuse. My

Administration has taken significant steps to lower the

costs of providing financial services for Americans and

reduce unnecessary and burdensome Federal regulations

that restrain economic growth and hamper the

competitiveness of financial service providers

nationwide. However, it has long been the policy of the

United States to adopt tailored measures to safeguard

our financial system from illicit use and promote safe

and sound lending and other practices by financial

institutions

growth and hamper the

competitiveness of financial service providers

nationwide. However, it has long been the policy of the

United States to adopt tailored measures to safeguard

our financial system from illicit use and promote safe

and sound lending and other practices by financial

institutions. My Administration will not tolerate

national security and public safety risks caused by

illicit cross-border financial activity, nor will it

permit risks to our financial system posed by the

extension of credit or financial services to the

inadmissible and removable alien population.

Even the provision of the most basic financial

services, absent proper know-your-customer practices,

can be abused to facilitate the funding of activities

that pose significant threats to national security and

public safety. Low-dollar cross-border funds transfers

have been used to facilitate or commit terrorist

financing, narcotics trafficking, human trafficking,

and other illegal activity. Financial trend analyses

have uncovered hubs of deadly fentanyl-related

financial activity in the United States related to

Mexico-based cartels. A recent analysis of Chinese

money laundering networks identified how foreign

passport holders have used United States-based accounts

to facilitate the laundering of over $312 billion for

criminal organizations, with human trafficking

highlighted among the activities associated with the

transfers

A recent analysis of Chinese

money laundering networks identified how foreign

passport holders have used United States-based accounts

to facilitate the laundering of over $312 billion for

criminal organizations, with human trafficking

highlighted among the activities associated with the

transfers. Robust customer identification programs and

enhanced due diligence measures are necessary to

mitigate these risks.

Banks and other financial institutions should also be

attentive to the credit risks posed by the extension of

mortgage and auto loans, credit cards, and other

consumer credit to the inadmissible and removable alien

population. Many of those borrowers face the

possibility of the loss of wages due to removal or

their employers' decisions to comply with immigration

law. Lending to aliens without legal work authorization

or who face a substantial loss-of-wage risk creates a

structural ``ability to repay'' deficiency that

undermines the safety and soundness of the national

banking system. Additionally, employers who violate

immigration law may underreport wages, use mismatched

or invalid Social Security numbers and taxpayer

identification numbers, or fail to properly withhold or

remit payroll taxes. Such schemes can create

vulnerabilities within our financial system by

obscuring income sources, distorting credit

underwriting, and facilitating underground economic

activity.

invalid Social Security numbers and taxpayer

identification numbers, or fail to properly withhold or

remit payroll taxes. Such schemes can create

vulnerabilities within our financial system by

obscuring income sources, distorting credit

underwriting, and facilitating underground economic

activity.

It is the policy of my Administration to restore

integrity to America's financial system, safeguard

financial institutions against structural risks, and

deter fraud and abuse.

Sec. 2. Definition. The term ``Federal functional

financial regulator'' means the Board of Governors of

the Federal Reserve System, the Office of the

Comptroller of the Currency, the Federal Deposit

Insurance Corporation, and the National Credit Union

Administration.

[[Page 30480]]

Sec. 3. Safeguarding Against Fraud and Abuse. (a)

Within 60 days of the date of this order, the Secretary

of the Treasury shall 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. This Advisory shall describe specific red

flags and typologies associated with the following

categories of suspicious activity:

financial institutions regarding the risks associated

with the exploitation of the United States financial

system by non-work authorized populations and their

employers. This Advisory shall describe specific red

flags and typologies associated with the following

categories of suspicious activity:

(i) evidentiary patterns of payroll tax evasion by employers or labor

brokers, including the systematic failure to withhold or remit Federal

employment taxes for non-work authorized individuals;

(ii) the utilization of certain foreign-identity documents, nominee

accounts, shell companies, or complex ``funnel'' structures designed to

obfuscate the identity of the ultimate beneficial owners or conceal the

true nature of payroll disbursements;

(iii) the strategic use of unregistered money services businesses, third-

party payment processors, or peer-to-peer platforms to facilitate ``off-

the-books'' wage payments intended to bypass Bank Secrecy Act reporting

thresholds or tax obligations;

(iv) patterns of repetitive, sub-threshold cash withdrawals or deposits

that correlate with payroll cycles conducted outside of regulated payroll

processing systems, also known as ``structuring and micro-structuring'';

(v) financial activity indicative of labor trafficking or forced labor (as

defined in 18 U.S.C. 1589), where proceeds are commingled with legitimate

business revenue or transferred to foreign jurisdictions; and

hreshold cash withdrawals or deposits

that correlate with payroll cycles conducted outside of regulated payroll

processing systems, also known as ``structuring and micro-structuring'';

(v) financial activity indicative of labor trafficking or forced labor (as

defined in 18 U.S.C. 1589), where proceeds are commingled with legitimate

business revenue or transferred to foreign jurisdictions; and

(vi) the use of an individual taxpayer identification number (ITIN) to

obtain credit products or open depository accounts where the applicant

lacks verified lawful immigration status. Although an ITIN facilitates tax

compliance, its use in lieu of a Social Security number or valid work-

authorized visa may be identified as a risk factor requiring enhanced due

diligence to ensure the account is not being utilized to facilitate the

unlawful employment of unauthorized aliens.

(b) Within 90 days of the date of this order, the

Secretary of the Treasury shall, in consultation with

the appropriate Federal functional financial

regulators, propose changes to applicable implementing

regulations of the Bank Secrecy Act to strengthen risk-

based customer due diligence requirements for covered

financial institutions. Such changes should ensure

that:

(i) institutions collect and verify sufficient customer identity

information to reasonably identify the nominal and beneficial owners of

accounts in order to assess risks related to illicit finance, sanctions

evasion, fraud, or other unlawful activity; and

customer due diligence requirements for covered

financial institutions. Such changes should ensure

that:

(i) institutions collect and verify sufficient customer identity

information to reasonably identify the nominal and beneficial owners of

accounts in order to assess risks related to illicit finance, sanctions

evasion, fraud, or other unlawful activity; and

(ii) institutions maintain the authority, where warranted by other risk

indicators or supervisory concerns, to obtain additional information

necessary to resolve material compliance concerns, including information

relevant to whether account holders possess lawful immigration status and

employment authorization in the United States when such information is

relevant to assessing risks associated with fraud, identity

misrepresentation, sanctions evasion, or other illicit financial activity,

as part of a risk-based customer due diligence program.

(c) Within 180 days of the date of this order, the

Secretary of the Treasury and the appropriate Federal

functional financial regulators shall consider changes

to applicable implementing regulations of the Bank

Secrecy Act to strengthen risk-based customer

identification program requirements for covered

financial institutions. Any changes considered should

account for the risks foreign consular identification

cards pose to the integrity of the United States

financial system.

nting regulations of the Bank

Secrecy Act to strengthen risk-based customer

identification program requirements for covered

financial institutions. Any changes considered should

account for the risks foreign consular identification

cards pose to the integrity of the United States

financial system.

Sec. 4. Addressing Structural Credit Risks. (a) Within

60 days of the date of this order, the Consumer

Financial Protection Bureau shall consider clarifying

that potential deportation and loss of wages are

factors that could adversely affect a non-work

authorized borrower's ability to repay an extension of

credit under the ``ability-to-repay'' standards in 12

CFR Part 1026

[[Page 30481]]

and its appendices and supplements, and that lenders

may consider such factors as part of a reasonable and

good-faith underwriting determination.

(b) Within 60 days of the date of this order, each

appropriate Federal functional financial regulator

shall issue guidance regarding the management of the

potential credit risks posed by the non-work authorized

population.

Sec. 5. General Provisions. (a) Nothing in this order

shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or

the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget

relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with

applicable law and subject to the availability of

appropriations.

uthority granted by law to an executive department or agency, or

the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget

relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with

applicable law and subject to the availability of

appropriations.

(c) This order is not intended to, and does not,

create any right or benefit, substantive or procedural,

enforceable at law or in equity by any party against

the United States, its departments, agencies, or

entities, its officers, employees, or agents, or any

other person.

(d) The costs for publication of this order shall

be borne by the Department of the Treasury.

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>

(Presidential Sig.)

THE WHITE HOUSE,

May 19, 2026.

[FR Doc. 2026-10400

Filed 5-21-26; 11:15 am]

Billing code 4810-25-P

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