Restoring Integrity to America's Financial System

What it does

• •Directs the Treasury Secretary to issue an advisory within 60 days identifying red flags and suspicious activity patterns related to payroll tax evasion, illicit financial structures, money laundering, labor trafficking, and use of Individual Taxpayer Identification Numbers (ITINs) by non-work-authorized individuals.
• •Requires Treasury and Federal financial regulators to propose changes within 90 days to Bank Secrecy Act regulations strengthening customer due diligence requirements, including collecting and verifying beneficial owner information and obtaining immigration status information where relevant to assessing financial risks.
• •Directs the Consumer Financial Protection Bureau within 60 days to clarify that potential deportation and wage loss are factors lenders may consider when assessing a non-work-authorized borrower's ability to repay credit under existing standards.
• •Requires each Federal functional financial regulator to issue guidance within 60 days on managing credit risks posed by the non-work-authorized population.

Why it matters

• •The order identifies illicit cross-border financial activity, terrorist financing, narcotics trafficking, human trafficking, and money laundering as national security and public safety threats requiring enhanced financial system safeguards.
• •The order asserts that lending to individuals without legal work authorization or facing substantial wage-loss risk creates structural weaknesses in banking system safety and soundness by impairing ability-to-repay assessments.
• •The order states it aims to restore financial system integrity by deterring fraud and abuse while maintaining regulatory measures against illicit finance and sanctions evasion.

Who is affected

• •Banks, credit unions, and other covered financial institutions subject to Bank Secrecy Act requirements and customer identification program regulations.
• •Non-work-authorized individuals and their employers, as the order addresses credit underwriting and financial activity patterns associated with this population.
• •Lenders extending consumer credit including mortgage, auto loans, and credit cards, who must reassess underwriting practices regarding borrower employment authorization status.

What happens next

Treasury and regulatory agencies will issue advisories, guidance, and proposed regulatory changes over the next 60 to 180 days as specified in the order, with implementation subject to applicable law and available appropriations.