What Credit Unions Need to Know: FinCEN, CFPB Respond to Citizenship EO

Posted by Erin Hall on June 5, 2026

-No New Regulatory Requirements-

On June 05, 2026, in response to President Trump’s Executive Order 14406, Restoring Integrity to America’s Financial System, the Financial Crimes Enforcement Network (FinCEN) and the Consumer Financial Protection Bureau (CFPB) issued separate releases addressing different aspects of the Order. FinCEN’s Advisory focuses on Bank Secrecy Act (BSA) monitoring and suspicious activity reporting, while the CFPB’s Statement focuses on repayment ability in certain lending decisions

FinCEN Advisory

The advisory issued by FinCEN, the FDIC, the OCC, and the NCUA in coordination with the IRS, signals increased scrutiny of payroll fraud, identity misuse, labor exploitation, and related financial crime.

The message is not that institutions face new obligations, but that regulators expect stronger suspicious activity reporting and more focus on due diligence where these risks are present. Institutions should be prepared to identify patterns involving unlawful employment, payroll tax evasion, and identity-related fraud, especially in higher-risk industries.

Why This Matters Now

The advisory responds to Executive Order 14406, Restoring Integrity to America’s Financial System, and reflects a broader policy push to prevent misuse of financial services in unlawful employment schemes. For credit unions, that likely means continued attention to customer risk profiling, beneficial ownership review, and unusual payroll-related activity.

How the Advisory Treats ITIN Use

The advisory’s discussion of Individual Taxpayer Identification Numbers (ITINs) is especially important. The agencies do not say that ITIN use is inherently suspicious. Instead, they explain that when an ITIN is presented in place of a Social Security number or valid work authorization, institutions may consider that fact as part of risk-based due diligence. In short, the focus is on context, not the ITIN itself.

Key Red Flags Highlighted by FinCEN

FinCEN also outlines several indicators of potentially suspicious activity. No single red flag is determinative, but common themes include:

• Identity information that appears inconsistent, including mismatched Social Security numbers.
• Accounts using passports or ITINs in ways that do not align with the stated business purpose or customer profile.
• Repeated check deposits, structured cash withdrawals, or multiple low-dollar checks payable to different individuals.
• Payroll activity, tax deposits, or business operations that appear inconsistent with the company’s size or claimed activity.
• Shell-company indicators, such as minimal online presence, questionable business addresses, or unusual remittance patterns.

For compliance, BSA/AML, and fraud teams, the takeaway is straightforward: revisit customer due diligence, account-opening controls, and transaction monitoring to ensure they can identify these patterns and support clear, well-documented suspicious activity reporting.

CFPB Statement

A related development came from the Consumer Financial Protection Bureau (CFPB), which issued a Statement on Ability to Repay and Immigration Status in response to the same executive order. While the FinCEN advisory focuses on financial crime detection, the CFPB statement addresses how creditors should apply existing ability-to-repay standards when immigration status could affect future income or continued employment.

The statement, scheduled for publication in the Federal Register, reiterates that creditors must make a reasonable, good-faith ability-to-repay determination under the Truth in Lending Act and Regulation Z before extending certain mortgage and open-end credit products.

The CFPB statement does not create a new legal requirement. Instead, it explains that if information in an application or creditor records indicates immigration status could reasonably affect future income, that information may be relevant to the ability-to-repay analysis.

The statement does not require creditors to collect citizenship or immigration status information. It simply underscores that known facts affecting income stability should be evaluated like any other repayment risk.

For credit unions, the practical step is to review underwriting and documentation practices for products subject to ability-to-repay requirements and confirm they consistently evaluate income continuity and other foreseeable repayment risks.

Take Away

Taken together, the FinCEN advisory and CFPB statement are less about new requirements and more about how regulators expect application of existing compliance and underwriting standards when unlawful employment or immigration-related factors affect financial crime risk or repayment ability.

GoWest welcomes member feedback on operational concerns, examination issues, account-opening impacts, and lending implications as agencies move from this advisory toward possible guidance or rulemaking.

Posted in Advocacy on the Move, Regulatory Advocacy.