New EO on Undocumented Customer Accounts
On May 19, 2026, the White House issued Executive Order 14406 addressing issues relating to lending and banking for customers lacking legal residency and work authorization. The order explains that national security and public safety risks arise from illicit cross-border financial activity. The order also describes risk to the financial system relating to extensions of credit or financial services to inadmissible and removable alien customers.
The order urges banks and non-bank financial institutions to monitor credit risks posed by extension of “mortgage and auto loans, credit cards, and other consumer credit” to customers who lack legal residency and work authorization. The order states that lending to such customers creates a “structural ‘ability to repay’ deficiency that undermines the safety and soundness of the national banking system.”
The order instructs the CFPB to “consider clarifying that potential deportation and loss of wages are factors that could adversely affect a non-work authorized borrower’s ability to repay an extension of credit…”
The order mentions existing “ability-to-repay” standards, but under current law, on the federal level those only exist for mortgage lending.
The order instructs Treasury to:
- Issue a formal advisory to financial institutions regarding risks to the financial system from exploitation by non-work authorized persons and their employers; and,
- In consultation with other banking regulators, propose changes to Bank Secrecy Act regulations to strengthen risk-based customer due diligence and customer identification requirements.
AFSA will monitor the work initiated under this order and share updates with members as we receive them.
May 28th, 2026
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