President Trump yesterday signed two executive orders that could significantly reshape both compliance expectations for financial institutions and the competitive landscape for fintech firms seeking deeper access to the U.S. payments system. One order focuses on tightening customer identification, anti-money laundering oversight, and underwriting scrutiny tied to undocumented immigrants, while the other pushes regulators to reduce barriers for fintech and digital asset companies seeking broader participation in the financial system.
The compliance-related order may carry the most immediate operational implications for the credit and collection industry. The directive instructs Treasury to issue advisories within 60 days outlining suspicious activity patterns tied to payroll tax evasion, labor trafficking, concealed account ownership, structured cash activity, and the use of ITINs to obtain financial services without verified legal status.
The order also pushes regulators to revisit Bank Secrecy Act customer due diligence requirements and potentially strengthen Customer Identification Program standards. Notably, the administration directed regulators to consider whether financial institutions should gather additional information tied to immigration or work authorization status when relevant to assessing fraud, sanctions evasion, or illicit financial activity.
For lenders, another closely watched provision directs the CFPB to consider clarifying that potential deportation or wage loss may factor into “ability-to-repay” determinations. That language could eventually influence underwriting standards for mortgages, auto loans, credit cards, and other consumer lending products, particularly for borrowers relying on ITINs or nontraditional documentation. Industry observers will likely debate whether the guidance creates clearer risk-management expectations or introduces operational and fair lending concerns.
Importantly, the final executive order stopped short of requiring banks to collect citizenship status information directly from customers, something the banking industry had reportedly lobbied aggressively against. According to the Associated Press, banks argued such a mandate would have created major compliance costs and operational burdens. The final version instead relies more heavily on guidance, advisories, and enhanced risk-based due diligence expectations.
At the same time, the administration is pursuing a much different approach on fintech innovation. The second executive order directs federal regulators to review regulations, supervisory practices, and licensing processes that may hinder fintech growth and competition. It specifically asks the Federal Reserve to examine whether uninsured depository institutions and nonbank fintech firms should receive expanded access to Federal Reserve payment accounts and payment services.
That issue has major implications for payment processors, digital asset firms, and fintech lenders that currently depend heavily on sponsor bank relationships to access payment rails. If expanded access eventually materializes, it could alter competitive dynamics across payments, real-time transfers, and embedded finance.
