U.S. regulators issue advisory on illicit activity tied to unlawful employment

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Regulators advisory on illicit employment

Highlights

On June 5, 2026, NCUA, FinCEN, FDIC, and OCC jointly issued an advisory directing banks and credit unions to monitor illegal employment-related financial crimes.
The advisory warns such activities can depress wages, enable identity theft, distort markets, and require enhanced due diligence and suspicious activity reporting.
Regulators clarified that detecting and reporting illicit employment schemes form part of core anti-money laundering supervisory expectations for U.S. financial institutions.

Joint advisory outlines compliance expectations

The National Credit Union Administration said it joined the U.S. Department of the Treasury’s Financial Crimes Enforcement Network, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency in issuing the advisory on June 5, 2026.

The guidance, developed in coordination with the Internal Revenue Service, tells credit unions and banks to remain alert to criminal activity involving the unlawful employment of illegal aliens. Regulators say such conduct may depress wages, facilitate identity theft, give employers unfair advantages over legitimate U.S. businesses and create broader harm across the financial system.

Financial institutions are also being told to report suspicious activity and apply enhanced due diligence when warranted under their compliance procedures.

Broader implications for banks and credit unions

The advisory places the issue within the financial crime monitoring responsibilities of institutions already subject to anti-money laundering and suspicious activity reporting rules. For lenders and deposit-taking institutions, that means potential added attention to transaction patterns, account behavior and customer relationships that may indicate illicit employment-related schemes.

By linking unlawful employment risks to market distortion and financial crime concerns, the regulators are signaling that related detection and reporting remain part of core supervisory expectations for the U.S. banking and credit union sectors.

Our earlier report on U.S. banking and credit union regulatory updates covered how lawmakers and federal banking officials are pushing for a more tailored prudential framework tied to institution size, complexity and risk. It also highlighted ongoing work on capital and supervision changes—alongside payments-related initiatives such as stablecoin proposals—aimed at supporting financial stability while avoiding unnecessary constraints on credit and innovation.

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