Global Employer Services News

On 19 May 2026, the White House issued a new Executive Order (EO) aimed at “restoring integrity to America’s financial system,” with a focus on illicit finance, customer due diligence standards and credit‑risk management across US financial institutions. The EO directs multiple federal agencies—including the Treasury Department, federal banking regulators and the Consumer Financial Protection Bureau (CFPB)—to tighten oversight and strengthen safeguards against fraud, money laundering and unsafe lending practices.
 
The EO cites growing national‑security and public‑safety risks tied to low‑dollar cross‑border transfers, foreign money‑laundering networks and financial activity linked to narcotics and human‑trafficking operations. It also highlights structural credit risks associated with lending to individuals lacking lawful work authorisation, noting that potential deportation and wage loss can undermine “ability‑to‑repay” standards.
 
Key actions include:

• Treasury Advisory (within 60 days): New red‑flag indicators for suspicious activity, including payroll‑tax evasion schemes, shell company structures, unregistered money‑service businesses and misuse of ITINs (Individual Taxpayer Identification Numbers) for credit or account access.
• Enhanced Bank Secrecy Act Regulations (within 90–180 days): Proposed updates to customer due diligence and identification requirements, including verification of beneficial ownership and consideration of immigration‑status information when relevant to risk.
• Credit‑Risk Guidance: The CFPB and federal banking regulators will clarify how lenders may factor immigration‑related wage‑loss risk into underwriting decisions.

The EO emphasises that these measures are intended to protect the US financial system from illicit use, strengthen safety and soundness, and deter fraud and abuse. It does not create new legal rights or benefits and will be implemented subject to existing law and available appropriations.
 

BDO Perspective

Although the EO is directed at federal agencies—not employers—it has downstream implications for businesses, particularly in payroll operations, worker‑verification practices and interactions with financial institutions.
 
Employers should anticipate:

• Enhanced scrutiny of payroll flows, including more frequent documentation and verification checks from banks and payroll providers.
• Closer examination of ITIN‑based wage payments, with financial institutions potentially requesting additional information to validate employment eligibility and payroll legitimacy.
• Increased attention to workforce‑related financial risk, especially for employers operating in high‑risk industries or with complex contractor networks.
• Employee‑level impacts, as individuals with temporary or uncertain work authorisation may face tighter access to credit or heightened documentation requirements.
• Greater emphasis on proactive work‑authorisation management, as delays or gaps in visa issuance or renewals can create payroll and banking friction. Ensuring work visas and employment‑authorisation documents are secured or renewed early can help avoid payroll disruptions, account‑verification issues and additional scrutiny from financial institutions.

While the EO does not impose new employer obligations at this stage, it signals a regulatory environment in which payroll transparency, worker‑verification controls and clean financial flows will face heightened scrutiny. Employers may wish to review internal controls and prepare for more robust engagement with financial partners.

Joe Pancamo
BDO in United States