Banking Services, Customer Due Diligence, and Know-Your-Customer

Secretary of the Treasury

Issue a formal advisory to financial institutions regarding potential financial crime risks associated with non-work authorized populations and their employers, including red flags and typologies for:

• Evidentiary patterns of payroll tax evasion by employers or labor brokers, including failure to withhold or remit federal employment taxes.
• Use of foreign-identity documents, nominee accounts, shell companies, or funnel structures designed to conceal beneficial ownership or payroll activity.
• Use of unregistered money services businesses, third-party payment processors, or peer-to-peer platforms to facilitate off-the-books wage payments.
• Repetitive sub-threshold cash activity patterns tied to payroll cycles outside regulated payroll systems (“structure and micro-structuring”).
• Financial activity indicative of labor trafficking or forced labor, including commingling with legitimate revenue or transfers abroad.
• Use of an individual taxpayer identification number (ITIN) to obtain credit products or open depository accounts without verified lawful immigration status; use of an ITIN in lieu of a Social Security Number or a valid work-authorized visa may be a risk factor requiring enhanced customer due diligence.

60 days

FRB, OCC, FDIC, NCUA

Individually issue guidance applicable to institutions under each agency’s supervision regarding management of potential credit risks associated with non-work authorized populations.

60 days

CFPB

Consider clarifying that potential deportation of a borrower and loss of wages are factors that could adversely affect a non-work authorized borrower’s ability to repay a mortgage loan under the standards in Regulation Z, which implements the Truth in Lending Act, and that lenders may consider such factors as part of a reasonable and good-faith underwriting determination.

60 Days

Secretary of the Treasury, in consultation with:

• FRB
• OCC
• FDIC
• NCUA

• Collect and verify sufficient customer identity information to reasonably identify nominal and beneficial account owners in order to assess risks related to illicit finance, sanctions evasion, fraud, or other unlawful activity.
• Maintain authority to obtain additional information, where warranted by other risk indicators or supervisory concerns, to resolve material compliance concerns including whether account holders possess lawful immigration status and employment authorization in the United States when it is relevant to assessing risks associated with fraud, identity misrepresentation, sanctions evasion, or other illicit financial activity.

90 days

Consider changes to applicable BSA-implementing regulations for covered financial institutions to strengthen risk-based customer identification programs, including risks associated with foreign consular identification cards.

180 days