On May 19, 2026, President Trump signed Executive Order 14406, titled “Restoring Integrity to America’s Financial System.” The order is not simply an immigration policy measure.
It is a structural intervention into the Bank Secrecy Act — the primary U.S. anti-money laundering law — that financial institutions have operated under for decades.
The compliance window is already open.
What the Order Does
E.O. 14406 directs the Treasury Department and federal banking regulators to amend BSA regulations to strengthen Customer Identification Program (CIP) and Customer Due Diligence (CDD) requirements. The stated objective: prevent exploitation of the U.S. financial system by non-work-authorized populations.
The order does not explicitly require financial institutions to verify the immigration status of every customer. But it creates a formal pathway to do so — and establishes binding deadlines for regulators to act.
Three timelines are now running:
- 60 days — Treasury must issue a formal advisory to financial institutions identifying red flags and typologies across six categories of suspicious activity.
- 90 days — Treasury and banking regulators must propose BSA amendments to strengthen risk-based CDD requirements.
- 180 days — Regulators must consider BSA amendments addressing the risks posed by foreign consular identification cards to the integrity of the U.S. financial system.
All three clocks started May 19.
Six suspicious activity categories financial institutions must prepare for
The mandatory Treasury advisory must address specific typologies, including:
- Payroll tax evasion patterns by employers or labor brokers involving non-work-authorized individuals
- Use of foreign-identity documents, nominee accounts, shell companies, or funnel structures to conceal beneficial ownership
- Off-the-books wage payments through unregistered money service businesses or peer-to-peer platforms
- Structuring and micro-structuring correlated with payroll cycles outside regulated processing systems
- Financial activity indicating labor trafficking or forced labor, where proceeds are commingled with legitimate business revenue
- Use of Individual Taxpayer Identification Numbers (ITINs) to open accounts or obtain credit where lawful immigration status is unverified
Compliance programs that have not previously mapped these typologies to existing SAR workflows need to begin that work now.
The operational and legal exposure is real
The BSA amendments under consideration would give financial institutions the authority — and potentially the obligation — to obtain information on whether account holders possess lawful immigration status and employment authorization, when relevant to assessing risks associated with fraud, identity misrepresentation, or sanctions evasion.
Daniel Gutierrez, Director for U.S. and International Financial Services at Foodman CPAs & Advisors, identified the core tension clearly:
“If Treasury’s guidance is not clear and concise, there may be fear in the industry of lawsuits filed by customers who may feel they were discriminated against by a financial institution that restricted, denied or closed an account in error. There are also important cost considerations.”
The operational challenges do not stop at new customer onboarding. Verifying immigration status for existing customers compounds the burden — in systems, staffing, documentation, and potential liability.
What Sophisticated Compliance Functions Are Doing Now
Institutions that wait for final rules will be behind.
The period between now and the 60-, 90-, and 180-day deadlines is the window to assess exposure — not react to it. That means reviewing existing CIP and CDD frameworks, identifying where current documentation would not support enhanced scrutiny, and mapping the six typology categories to SAR and transaction monitoring workflows.
It also means understanding the cross-border dimension. Institutions with international correspondent relationships or Latin American counterparties operate under multiple regulatory frameworks simultaneously. U.S. supervisory signals do not replace FATF standards or other jurisdictional obligations. The compliance function must hold up under all of them.
The Bottom Line
E.O. 14406 places immigration enforcement directly adjacent to BSA compliance obligations.
The rules are not final. The guidance has not been issued. But the direction is clear, the deadlines are fixed, and the exposure is present today.
At Foodman CPAs & Advisors, we are already working through what this means for BSA/AML program design, CIP rule amendments, and the operational and legal risks financial institutions are carrying right now.
These are the questions our Regulatory Help Desk is receiving. They are the right questions to be asking.
🔗 Source: This analysis is based on reporting by Brett Wolf, published May 29, 2026, in Thomson Reuters Regulatory Intelligence: “Trump order wielding customer identification rules against illegal immigrants alarms banking industry.” Additional reference: Executive Order 14406 — Federal Register, Vol. 91, May 22, 2026. https://federalregister.gov/d/2026-10400
