On May 19, 2026, President Donald Trump signed an executive order aimed at strengthening protections against financial fraud, illicit finance, and credit risks tied to unauthorized employment and cross-border financial activity. The order directs several federal agencies, including the Treasury, the CFPB, and federal banking regulators, to issue guidance and consider regulatory changes impacting banks, credit unions, and other financial institutions.

One of the focus of the order is enhanced BSA and customer due diligence (CDD) expectations. The Treasury Department is directed to issue an advisory outlining red flags tied to suspicious financial activity, including payroll tax evasion, funnel accounts, shell companies, structuring, labor trafficking, and the use of individual taxpayer identification numbers in opening accounts or obtaining credit products. The order also calls for proposed updates to BSA regulations requiring institutions to collect and verify additional customer identity information to better identify beneficial owners and assess risks related to fraud, sanctions evasion, and other illicit activity.

In addition, the CFPB and federal banking regulators are directed to review credit underwriting practices related to “ability-to-repay” standards. The order suggests that lenders may consider the potential loss of wages tied to deportation or employment disruptions as part of assessing repayment ability. Federal regulators are also expected to issue guidance on managing related credit risks within the banking system.

The full E.O. can be found here.