The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), jointly with the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the National Credit Union Administration (NCUA) (collectively, the Agencies), in coordination with the Internal Revenue Service (IRS), has issued Advisory FIN-2026-A002 (the Joint Advisory) to advise financial institutions to be vigilant against fraud schemes and other suspicious or potentially criminal activities related to the unlawful employment of people without legal work authorization.
The Joint Advisory was issued pursuant to Executive Order 14406, “Restoring Integrity to America’s Financial System,” issued on May 19, 2026, which directed the Secretary of the Treasury to instruct financial institutions as part of a whole-of-government effort to address the risks associated with the use of the US financial system by persons not legally authorized to be in the United States and employers of such persons.
Action items for financial institutions
Because FinCEN advisories are intended to inform institutions’ Anti-Money Laundering (AML) policies and procedures, in light of the Joint Advisory, financial institutions should consider whether they must amend or revise their AML practices. In most cases, the answer is likely to be yes, with respect to updating procedures that may relate to the typologies identified in the Joint Advisory. This may require institutions to note their consideration of the Joint Advisory and planned responses in the minutes of their compliance committee meetings and follow through on steps they identify as action items.
Overview
The Joint Advisory addresses two primary areas of focus:
- Persons or entities that engage in criminal activities to enable “complicit employers” to hire undocumented workers
- Individual customers who are not legally authorized to work in the United States
Note, however, that a single red flag is not determinative of illicit or suspicious activity, and no single red flag should be taken in isolation. Financial institutions should consider the totality of surrounding facts and circumstances—such as a customer’s historical financial activity, whether transactions are in line with prevailing business practices and whether the customer exhibits multiple red flags—before determining whether a behavior or transaction is suspicious or otherwise indicative of risks to the integrity of the US financial system.
Large companies
Much of the Joint Advisory focuses on persons or entities that engage in criminal activities to enable “complicit employers” to hire undocumented workers. With respect to such entities, banks must now be on the alert for practices that may be characteristic of such operations, including large companies in the agriculture, construction, domestic service, hospitality or staffing industries, that:
- Have been identified by United States Immigration and Customs Enforcement (ICE) worksite enforcement news releases and open-source reporting as having a history of worksite compliance violations
- Have significant business operations and transactional activity but with little to no payroll activity commensurate with the customer’s profile
- Are making federal and state payroll tax deposits that are significantly less than what would be expected based on their business operations and associated workforce size
- Are issuing a significant and repetitive amount of checks to a singular or small number of recently established companies with little to no online presence
- Recently acquired a workers’ compensation policy for a small number of workers that is not commensurate with their customer profile and transactional activity
Small companies
In addition, for small companies in the agriculture, construction, domestic service, hospitality or staffing industries, financial institutions must be alert to:
- Beneficial owners that have no known prior involvement with, or in, the company or these industries and may have prior fraud convictions
- Companies with minimal to no history of tax or payroll-related payments to the IRS, state and local tax authorities or a third-party payroll company, despite a large volume of deposits from clients
- Conducting large or unusual volumes of cash withdrawals or negotiation of checks for cash when accompanied by another involved person(s), or using an armored car service to deliver bulk cash (conducting informal or off-the-books payroll)
- Issuing recurring, large volumes of checks for under US$1,000 that are made payable to a significant number of separate individuals who cash the checks
- A new customer (less than two years old) with minimal to no online presence and indicators of being a shell company
Individual customers
The other focus of the Joint Advisory is on persons that are undocumented. The typologies for such customers include:
- The use of a Social Security number (SSN) that, upon review, does not match or is inconsistent with Social Security Administration records
- Accounts opened using a non-US passport or Individual Taxpayer Identification Number (ITIN), where the customer claims to be self-employed or operating a small business in the agriculture, construction, domestic service, hospitality or staffing industries and is receiving a significant amount and volume of recurring check deposits from multiple companies before either making a significant and repetitive amount of structured cash withdrawals or issuing low-dollar checks to multiple individuals
- Cashing of a significant volume of checks drawn on accounts owned by companies in the agriculture, construction, domestic service, hospitality or staffing industries on a recurring basis at an Money Services Business (MSB), including a check casher
- Recurring Peer-to-Peer Payment (P2P) payments from a small, recently established company in the agriculture, construction, domestic service, hospitality or staffing industries
- A customer who works in the agriculture, construction, domestic service, hospitality or staffing industries and opens a bank account with an ITIN with little to no transactional activity besides remittances to foreign jurisdictions
- A customer who opens an account for a company (particularly small proprietorships) in the agriculture, construction, domestic service, hospitality or staffing industries and is attempting to use a Commercial Mail Receiving Agency instead of a business address
- Customers who possess no known prior involvement in the agriculture, construction, domestic service, hospitality or staffing industries and provide a non-US passport or ITIN as a form of identification when opening an account for a new company in those industries
- A customer who makes statements as the account holder or company representative to bank tellers or check cashers that the purpose of the cash withdrawals, negotiation of checks for cash or check cashing activity is for payroll, but the volume, amount and frequency of transactions are uncharacteristic for a company in agriculture, construction, domestic service, hospitality or staffing industries with a small number of employees
ITIN: Enhanced due diligence
Given the directives included in the Joint Advisory, at a minimum, at the account opening stage or when new products are sought, if an ITIN is presented in lieu of an SSN or valid employment authorization document, banks are encouraged to evaluate whether the use of an ITIN may be a relevant risk factor. In such circumstances, banks are encouraged to evaluate the customer in light of the totality of other factors and information available to the bank, particularly for the purpose of developing customer risk profiles and conducting ongoing monitoring to identify and report suspicious transactions. We would also suggest that if a longstanding customer applies for a new product or service from a bank, the bank will be expected to use the occasion to review whether the account was originally opened using an ITIN but no additional documentation. If so, the bank should probably engage in a totality of circumstances review, as described above.
If you need assistance assessing the impact of the Joint Advisory on your institution, please reach out to one of the authors listed below.