White House Executive Orders On Restoring Integrity To America’s Financial System And Integrating Financial Technology Innovation Into Regulatory Frameworks

On May 19, 2026, President Trump signed two Executive Orders that will significantly impact the regulatory landscape for financial institutions, fintech companies, and market participants across the United States. This alert summarizes the key provisions of each order and highlights critical compliance considerations for our clients.

Executive Order on Restoring Integrity to America’s Financial System

This Executive Order is directed at safeguarding the U.S. financial system from illicit use and addressing risks that the Administration associates with the extension of financial services to what the order terms “non-work authorized populations.” The order declares it the policy of the Administration to “restore integrity to America’s financial system, safeguard financial institutions against structural risks, and deter fraud and abuse.”

Treasury Advisory on Financial System Exploitation

Within 60 days, the Secretary of the Treasury is required to issue a formal Advisory to financial institutions regarding risks associated with exploitation of the U.S. financial system by non-work authorized populations and their employers. The Advisory must describe specific red flags and typologies of suspicious activity, including the following categories:

Payroll tax evasion patterns, including systematic failure to withhold or remit Federal employment taxes for non-work authorized individuals. Use of foreign-identity documents, nominee accounts, shell companies, or complex “funnel” structures designed to obfuscate the identity of beneficial owners or conceal the true nature of payroll disbursements. Use of unregistered money services businesses, third-party payment processors, or peer-to-peer platforms to facilitate off-the-books wage payments intended to bypass Bank Secrecy Act reporting thresholds or tax obligations. Patterns of repetitive, sub-threshold cash withdrawals or deposits correlated with payroll cycles, characterized as “structuring and micro-structuring.” Financial activity indicative of labor trafficking or forced labor (as defined in 18 U.S.C. § 1589), where proceeds are commingled with legitimate business revenue or transferred to foreign jurisdictions. Use of Individual Taxpayer Identification Numbers (ITINs) to obtain credit products or open depository accounts where the applicant lacks verified lawful immigration status, which the order identifies as a risk factor requiring enhanced due diligence.

Strengthened Customer Due Diligence and Identification Requirements

Within 90 days, the Secretary of the Treasury, in consultation with Federal functional financial regulators (defined as the Federal Reserve Board, OCC, FDIC, and NCUA), must propose changes to Bank Secrecy Act implementing regulations to strengthen risk-based customer due diligence requirements. These changes should ensure that institutions collect and verify sufficient customer identity information to reasonably identify both nominal and beneficial owners of accounts in order to assess risks related to illicit finance, sanctions evasion, fraud, or other unlawful activity. Institutions should also maintain authority, where warranted by risk indicators or supervisory concerns, to obtain additional information — including information relevant to whether account holders possess lawful immigration status and employment authorization — as part of a risk-based due diligence program.

Within 180 days, the Treasury and regulators must also consider changes to customer identification program requirements, including addressing risks that foreign consular identification cards may pose to the integrity of the U.S. financial system.

Addressing Structural Credit Risks

Within 60 days, the Consumer Financial Protection Bureau (CFPB) is directed 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 credit under the “ability-to-repay” standards in 12 C.F.R. Part 1026, and that lenders may consider such factors as part of a reasonable and good-faith underwriting determination. Each Federal functional financial regulator must also issue guidance within 60 days regarding the management of credit risks posed by the non-work authorized population.

The order frames this directive in safety-and-soundness terms, noting that lending to individuals without legal work authorization or who face substantial loss-of-wage risk creates a structural “ability to repay” deficiency that undermines the safety and soundness of the national banking system.

Executive Order on Integrating Financial Technology Innovation into Regulatory Frameworks

The second Executive Order focuses on fostering financial technology innovation by updating regulatory frameworks to reduce barriers to entry and promote collaboration between fintech firms, regulated financial institutions, and Federal regulators. The order declares it the policy of the United States to “streamline regulatory processes, reduce unnecessary barriers to entry, and encourage collaboration between fintech firms, federally regulated financial institutions, and Federal financial regulators.”

Definition of Fintech Firm

The order defines “fintech firm” broadly as any non-bank company that uses or develops technological means to offer or support the offering of financial products or services, expressly encompassing payment processing, lending, deposit-taking, derivatives, investment management, brokerage, underwriting, custodial and fiduciary services, digital banking, digital asset-related services, securities and commodities market activities, and blockchain-based services. The definition also cross-references the activities set forth in sections 4(k)(4)(A) through (G) of the Bank Holding Company Act of 1956.

Regulatory Review and Streamlining

Within 90 days, each Federal financial regulator — defined to include the CFPB, SEC, NCUA, CFTC, FDIC, and OCC — must conduct a review of existing regulations, guidance, supervisory practices, and application processes to identify those that could be updated to facilitate innovation and competition for fintech firms, particularly small and emerging ones. These reviews must specifically identify regulations and other items that unduly impede fintech firms from entering into partnerships with federally regulated institutions, as well as items that could be amended to streamline application processes for bank charters, credit union charters, deposit or share insurance, and other Federal licenses and authorizations. The reviews must balance innovation interests with “safety and soundness, consumer and investor protection, market integrity, financial stability, and oversight.”

Within 180 days, each regulator must take steps, in consultation with the Assistant to the President for Economic Policy, to encourage innovation as a result of the review.

Access to Federal Reserve Payment Services

The order requests the Federal Reserve Board (FRB) to conduct a comprehensive evaluation of the legal, regulatory, and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and non-bank financial companies, including those engaged in digital assets and other novel financial activities. Within 120 days, the FRB is requested to submit a report to the President setting forth its findings, options, and recommendations.

The FRB evaluation is requested to assess the legal authority of the Federal Reserve to extend direct access to payment accounts and services to such covered firms; options for expanding such access subject to appropriate risk management; legal impediments precluding direct access and legislative or regulatory options to enable it; and whether individual Federal Reserve Banks have independent legal authority to grant or deny access, and what FRB-level regulations or policies should ensure consistency across all twelve Reserve Banks.

To the extent the FRB determines that existing law permits extending direct access for covered firms, it is requested to establish transparent application procedures and to make determinations on complete applications within 90 days of the application date.

Key Takeaways for Financial Institutions and Fintech Firms

Financial institutions should begin assessing their current customer identification, due diligence, and BSA/AML compliance programs in anticipation of the Treasury Advisory and forthcoming regulatory changes under the first order. Lenders should evaluate the potential impact on their underwriting standards and credit risk management practices, particularly with respect to the CFPB’s anticipated ability-to-repay guidance.

Fintech firms should closely monitor the regulatory reviews mandated by the second order, which may open new partnership and licensing pathways with regulated institutions. The FRB’s evaluation of access to Federal Reserve payment services could be particularly consequential for digital asset firms and other non-bank financial companies seeking direct access to the payments infrastructure.

Both orders include standard general provisions clarifying that they do not create any right or benefit enforceable at law or in equity by any party, and that implementation is subject to applicable law and the availability of appropriations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.