Banking and Finance Law Daily Wrap Up, FINANCIAL STABILITY—Trump issues executive orders on financial-system integrity, fintech regulation, (May 20, 2026)

By Shashi Kant, BALLB, LL.M.

White House directs Treasury, CFPB, banking agencies, and the Fed to review customer-identification, credit-risk, and payment-access policies; industry reaction is mixed.

President Donald Trump issued two executive orders affecting customer-identification standards, consumer-credit underwriting, and fintech access to federal payment infrastructure. In one order, Restoring Integrity to America’s Financial System, the White House directed the Treasury Department, the Consumer Financial Protection Bureau, and federal financial regulators to pursue actions related to illicit-finance risks, customer due diligence, customer identification, and credit risks associated with lending to what the order calls the “non-work authorized” population. In a second order, Integrating Financial Technology Innovation into Regulatory Frameworks, the White House directed federal financial regulators to review rules, guidance, supervisory practices, and application processes that may impede fintech firms and asked the Fed to review the legal and policy framework governing access to Reserve Bank payment accounts and payment services.

Integrity order targets AML, due diligence, and credit-risk issues. In a fact sheet, the White House said the financial-system-integrity order is intended to protect the financial system from illicit activity, strengthen customer-identification requirements, and address credit risks posed by extending financial services to non-work-authorized individuals. The order directs Treasury, within 60 days, to issue a formal advisory to financial institutions identifying red flags and suspicious activity patterns tied to payroll tax evasion, concealment of true account ownership, off-the-books wage payments, structuring, labor trafficking, and use of individual taxpayer identification numbers in certain account-opening and credit contexts. Within 90 days, Treasury is directed, in consultation with federal financial regulators, to propose changes to Bank Secrecy Act regulations to strengthen risk-based customer due diligence requirements. Within 180 days, Treasury and the appropriate federal regulators are directed to consider changes to customer identification program requirements, including risks associated with foreign consular identification cards.

The same order also addresses consumer-credit underwriting. It directs the CFPB, within 60 days, to consider clarifying that potential deportation and loss of wages are factors lenders may consider under ability-to-repay standards for certain borrowers. It also directs the appropriate federal financial regulators, within 60 days, to issue guidance regarding management of potential credit risks posed by that population.

Fintech order calls for regulatory review and Fed payment-access study. In a separate fact sheet, the White House said the fintech order is intended to streamline regulations and promote innovation and collaboration between fintech firms, federally regulated financial institutions, and financial regulators. The order directs each federal financial regulator, within 90 days, to review regulations, guidance, supervisory practices, and application processes that could be updated to facilitate innovation and greater competition in financial services, particularly for smaller and emerging fintech firms. Within 180 days, regulators are directed to take steps, informed by those reviews, to encourage innovation.

The order separately asks the Federal Reserve Board to conduct a comprehensive evaluation of the legal, regulatory, and policy framework governing access to Reserve Bank payment accounts and payment services by uninsured depository institutions and nonbank financial companies, including firms engaged in digital assets and other novel financial activities. Within 120 days, the Fed is asked to submit findings, options, and recommendations addressing legal authority for such access, options for expanding access subject to risk-management requirements, legal impediments to broader access, and the respective roles of the Reserve Banks and the Fed in making access determinations. The order also states that, if the Fed concludes existing law permits such direct access, it is asked to establish transparent application procedures and act on complete applications within 90 days.

Lummis, fintech groups welcome payment-access review. Senator Cynthia Lummis (R-Wyo.) said the fintech order puts the Fed “on notice” that it must provide equal access to the payments system for eligible fintech companies and said the action would promote competition and lower payment costs for consumers. The Financial Technology Association said the order directs agencies to identify and address barriers to fintech access to the financial system, including barriers to access to Fed services. The American Fintech Council said the order would help modernize the regulatory framework, remove unnecessary barriers to innovation, and promote what it described as a more level playing field for responsible fintech firms.

Banking groups urge caution and parity. The American Bankers Association said any firm seeking to offer bank-like services should be held to the same rigorous regulatory and consumer-protection requirements as banks. ABA President and CEO Rob Nichols said the regulatory review directed by the fintech order should allow innovation without compromising what he described as the safe and sound financial system in place today. On the separate integrity order, Nichols said banks share the administration’s goal of ensuring a safe, sound, and secure financial system and that the industry works daily to prevent bad actors from gaining access. He said ABA would continue working with the administration, law enforcement, and other stakeholders to ensure the actions strengthen financial defenses while maintaining consumer access to banking services.

The Independent Community Bankers of America said the integrity order recognizes the know-your-customer and due-diligence requirements community banks already meet under the Bank Secrecy Act, but it also said policymakers should avoid information-collection requirements that impose substantial burdens on community banks, undermine their ability to serve local communities, or drive customers out of the regulated banking system.

America’s Credit Unions said the executive order does not require universal citizenship collection on existing or new accounts. Its statement said the group had urged policymakers to proceed through official rulemaking, include stakeholder input and reasonable implementation time, and avoid mandatory citizenship-collection requirements.

Companies: America’s Credit Unions; American Bankers Association; American Fintech Council; Financial Technology Association; Independent Community Bankers of America

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