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      The White House on May 19, 2026, issued Executive Order 14406, “Restoring Integrity to America’s Financial System.”[1] It directs the U.S. Treasury Department and other federal financial regulators to review policies and consider changes that would strengthen customer identification requirements for financial institutions and increase scrutiny of financial activities associated with payroll tax evasion, the use of Individual Taxpayer Identification Numbers (ITINs) for account opening or obtaining credit products, and other related compliance risks.

      The order serves as a policy signal rather than an immediate change to any law, rule, or regulation. While the order primarily targets unauthorized employment and illicit financial activities, if these proposed changes ultimately translate into new compliance rules or stricter banking regulations, multinational employers and their global mobility programs will likely face tangible operational challenges.

      WHY THIS MATTERS

      If regulatory agencies and financial institutions implement the recommendations signaled in this order, international assignees could face banking and lending friction. Global mobility arrangements, which often involve split payrolls, cross-border payments, and the use of ITINs, could unintentionally fall within the broader sweep of these policy initiatives.

      Background

      Executive Order 14406, "Restoring Integrity to America’s Financial System," directs the Treasury Department and other federal financial regulators to evaluate and potentially tighten financial institution policies aimed at curbing illicit financial activity, unauthorized employment, and payroll tax evasion. In describing the policy rationale for these actions, the order states that immigration law violations may be associated with wage underreporting, the use of mismatched or invalid taxpayer identification numbers, and failures in payroll tax withholding or remittance. It identifies these practices as creating vulnerabilities in the financial system.

      For global mobility programs, the most significant aspect of the directive is the call for stricter know-your-customer practices. This includes heightened scrutiny of the use of ITINs to open bank accounts or obtain loans and other consumer credit products. It also contemplates that reliance on an ITIN in lieu of a Social Security Number (SSN) may prompt requests for additional documentation, such as evidence of lawful immigration status or work authorization. The order establishes a phased 60-, 90-, and 180-day timeline for the Treasury Department, the Consumer Financial Protection Bureau (CFPB) and other federal financial regulators to issue advisories, guidance, and proposed regulatory changes related to customer due diligence, customer identification, and credit risk.

      KPMG INSIGHTS

      Although the order does not impose new employer compliance requirements, it initiates a phased regulatory and guidance process that may lead financial institutions to apply greater scrutiny to fact patterns common in global mobility programs, such as split or shadow payrolls, cross-border payments, delayed SSN issuance, and ITIN-based tax administration. While the order is aimed primarily at unlawful employment and related underground-economy activity, as a practical matter, lawful assignees may encounter slower account opening processes, increased documentation requests, and delayed or denied applications for auto loans, mortgages, or credit cards, where payroll, immigration, and identity records are incomplete, inconsistent, or difficult for financial institutions to reconcile.

      ENDNOTES:

      1 Exec. Order No. 14406, "Restoring Integrity to America's Financial System," (May 19, 2026), available at https://www.whitehouse.gov/presidential-actions/2026/05/restoring-integrity-to-americas-financial-system/.

      RELATED RESOURCE

      For additional information, see KPMG regulatory alert, “Banking Services, Customer Due Diligence, And Know-Your-Customer” (June 2026).

      Contacts

      John T. Seery
      John Seery

      Principal, Washington National Tax – Global Mobility Services

      KPMG in the U.S.

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      The above information is not intended to be “written advice concerning one or more federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.

      The information contained in this newsletter was submitted by the KPMG International member firm in the United States.

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