On May 19, 2026, President Trump signed an Executive Order titled Restoring Integrity to America's Financial System , signaling a significant shift in federal expectations for how…
On May 19, 2026, President Trump signed an Executive Order titled Restoring Integrity to America's Financial System, signaling a significant shift in federal expectations for how banks, credit unions, money services businesses, and other financial institutions identify and monitor their customers. The Order is framed around three central objectives: protecting the financial system from illicit activity, strengthening customer identification requirements, and addressing credit risks associated with extending financial services to non-work-authorized aliens. Institutions that serve diverse customer bases, including non-citizen account holders, should anticipate heightened regulatory scrutiny in the months ahead.
A central feature of the Order is its direction to the Secretary of the Treasury to issue an advisory identifying specific red flags that warrant enhanced attention from financial institutions. These red flags include payroll tax evasion, off-the-books wage payments, indicators of labor trafficking, and the use of Individual Taxpayer Identification Numbers (ITINs) to open accounts without verified legal presence in the United States. While ITINs have long been a permissible identification tool under existing Customer Identification Program (CIP) rules, the Order signals that regulators will expect institutions to apply additional diligence when ITIN-based onboarding intersects with other risk indicators.
For compliance officers and in-house counsel, the practical implications are immediate. Financial institutions should review existing CIP documentation, account-opening workflows for ITIN customers, and ongoing transaction monitoring rules to ensure they align with the activities the forthcoming Treasury advisory is expected to highlight. Anti-money laundering (AML) programs should be assessed for their ability to detect payroll-related evasion patterns, structured cash wage activity, and trafficking indicators. Lenders extending consumer or small business credit to non-work-authorized customers should also revisit credit underwriting standards and reputational risk assessments.
Boards and senior management should expect examiners to inquire about how the institution has responded to the Order and any subsequent Treasury guidance. Documenting risk assessments, policy updates, and staff training tied to these developments will be important for demonstrating a proactive compliance posture.
This update is provided for general informational purposes only and does not constitute legal advice. Financial institutions and businesses should consult qualified counsel to evaluate how the Executive Order and any implementing guidance apply to their specific operations and customer base.