[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. 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. 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.
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:
(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
(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
(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.
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.
(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.
(Presidential Sig.)
THE WHITE HOUSE,
May 19, 2026.
[FR Doc. 2026-10400
Filed 5-21-26; 11:15 am]
Billing code 4810-25-P