Following Executive Order “Restoring Integrity to America’s Financial System,” the Treasury Department and financial regulatory agencies (including FinCEN, the OCC, and the CFPB) are issuing advisories and updated guidance. These measures direct financial institutions to tighten oversight on identity theft, illicit wire transfers, shell companies, and payroll tax fraud linked to unauthorized labor.

No. Treasury Secretary Scott Bessent emphasized that banks are not expected to enforce immigration laws or check immigration status directly. Instead, banks are instructed to rely on standard Know Your Customer (KYC) and Customer Due Diligence (CDD) protocols to identify suspicious transactions, verify customer identity documents, and report potential financial risks or fraudulent activities to federal regulators.

Banking regulators, including the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB), are reviewing how financial risk is calculated for non-citizens without work authorization. Factors such as potential legal risks, lack of formal work authorization, or deportation exposure may be evaluated during credit underwriting, potentially making it harder for individuals without legal status to open traditional bank accounts or obtain credit.

Proponents argue that restricting access to formal banking, wire services, and payroll mechanisms removes financial incentives for unauthorized employment and deters illegal entry. The administration also targets cartels, human trafficking rings, and labor brokers that exploit informal financial networks or use shell companies to transfer money cross-border.

Pushing Activity Underground: Critics argue that restricting access to mainstream bank accounts does not eliminate unauthorized workers but instead forces them into cash-only or unmonitored shadow economies, making tracking illicit funds harder for law enforcement.
Compliance Burden: Financial institutions worry that overly strict due diligence requirements could increase administrative costs, slow down account openings, or complicate legitimate business operations for foreign-born individuals or non-citizens with valid Taxpayer Identification Numbers (ITINs).