Regulators release advisory, statement following citizenship Executive Order

Federal financial regulators and the Financial Crimes Enforcement Network (FinCEN) issued two separate releases Friday in response to an earlier Executive Order addressing undocumented immigrants’ interaction with financial institutions.

Neither imposes new account-opening, citizenship-verification, or immigration-status collection requirements, but are relevant to credit unions because agencies are identifying activity that may receive more attention in Bank Secrecy Act/anti-money laundering monitoring, Suspicious Activity Report filings, and examinations.

FinCEN issued a joint advisory with the NCUA, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Internal Revenue Service on fraud schemes and other suspicious activity involving the unlawful employment of non-work-authorized individuals and related risks to the U.S. financial system.

The advisory applies to credit unions but does not create a new rule or impose a new requirement to collect citizenship or immigration status. It identifies red flags and examples of suspicious activity involving identity theft, payroll fraud, shell companies, labor brokers, check cashing, structured cash withdrawals, peer-to-peer payments, and Individual Taxpayer Identification Number use in certain account-opening or credit contexts

The CFPB issued a Statement on Ability to Repay and Immigration Status, reminding creditors of their existing obligations under the Truth in Lending Act and Regulation Z to assess a borrower’s ability to repay before extending certain types of credit.

America’s Credit Unions issued an Advocacy Alert to members Friday with additional context and what credit unions should know about the releases.