The Financial Crimes Enforcement Network (FinCEN) issued an advisory on June 5, 2026, urging banks to identify payroll schemes associated with individuals living in the U.S. without legal authorization. This advisory is part of the Trump administration's efforts to address immigration-related financial crimes. The advisory instructs banks to be vigilant for signs of identity theft, payroll tax fraud, and money laundering linked to the hiring of unauthorized workers.
In May, President Donald Trump signed an executive order requiring banks to scrutinize the citizenship status of their customers. The order directs bank regulators and government agencies to monitor for indications that individuals without legal status are opening financial accounts or obtaining loans. However, the order is less stringent than anticipated, as previous reports indicated that the White House was considering making citizenship information collection mandatory.
Treasury Secretary Scott Bessent stated that the administration aims to prevent unauthorized individuals from exploiting financial institutions. He noted that schemes to compensate unlawful workers often depend on access to the U.S. financial system, including banks. The banking sector had previously lobbied against mandatory citizenship status collection, arguing it would impose significant costs and paperwork. The advisory provides guidance rather than a mandate, suggesting a compromise with the banking industry. FinCEN's advisory lists over a dozen 'red flags' for banks to monitor that may indicate illegal residency.
