The White House issued an executive order on Wednesday titled Restoring Integrity to America’s Financial System directing the National Credit Union Administration (NCUA) and other federal financial regulators to address undocumented immigrants’ interaction with financial institutions.

The executive order does not require universal citizenship collection on existing or new accounts.

In advance of any executive order, America’s Credit Unions coordinated with California’s and Nevada’s Credit Unions, other state credit union leagues and system partners, proactively addressing the issue with the U.S. Treasury Department with a letter and in conversations with White House officials. The letter outlined opposition to any mandatory citizenship collection requirement while urging that any new mandate include good-faith compliance standards, a reasonable implementation period, apply only prospectively, and proceed through notice-and-comment rulemaking.

Here are the steps required by the executive order:

Within 60 days:

• Treasury must issue an Advisory listing red flags for suspicious activity, including ITIN accounts, consular ID use, and payroll-related structuring.
• NCUA and other banking regulators (including the Federal Reserve, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation) must issue guidance on credit risks of lending to non-work-authorized borrowers.
• The Consumer Financial Protection Bureau (CFPB) will consider whether deportation and wage loss can be weighed in ability-to-repay decisions.

Within 90 days:

• Treasury will propose Bank Secrecy Act (BSA) rule changes allowing institutions to ask about immigration status in risk-based due diligence.

Within 180 days:

• Treasury and the financial regulators are to consider tightening Customer Identification Program (CIP) rules on foreign consular ID cards.

The day-to-day impact on credit unions’ member onboarding will depend on Treasury Advisory and any future CIP rule. The credit risk guidance’s effect on consumer and mortgage underwriting depends on the level of the NCUA’s directive. The BSA rulemaking and CFPB Ability-to-Repay clarifications will go through agency processes before taking effect, and America’s Credit Unions will engage with members to provide comments.

As part of ongoing outreach, state leagues and America’s Credit Unions will engage Treasury, the Financial Crimes Enforcement Network (FinCEN), NCUA, and the CFPB on each of the regulatory undertakings at every stage.