Treasury Secretary Scott Bessent on Friday called on banks to serve as partners in the federal government’s effort to combat payroll fraud, labor exploitation, and other financial crimes tied to undocumented workers, as the department separately clarified that lenders can share data on suspected fraud with one another under existing safe-harbor protections.

Speaking to Texas community bankers in Houston, Bessent framed the initiative in national-security terms, telling bankers that identifying and reporting illicit financial activity linked to migrants was “real national-security work” and that economic security was inseparable from national security.

“You are not simply providing financial services,” Bessent told the gathering in analogous to the rhetoric Treasury has historically used to urge institutions to help combat money laundering and terrorism financing. “You are helping protect the integrity of the American financial system and the security of the American people.”

The speech came roughly a week after the Financial Crimes Enforcement Network (FinCEN), Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, and National Credit Union Administration issued a joint advisory warning institutions to be alert to payroll fraud and identity-theft schemes involving undocumented migrants. The advisory, coordinated with the Internal Revenue Service, outlined 18 red-flag indicators and cited more than $2.5 billion in suspicious financial activity tied to such payroll tax fraud schemes reported to FinCEN in 2025 alone.

Bessent on Friday cited those figures, saying such schemes hurt law-abiding businesses, depressed wages, stole taxpayer dollars, facilitated identity theft, and created opportunities for transnational criminal organizations to generate and move illicit proceeds.

Focusing heavily on the agriculture, construction, domestic service, hospitality, and staffing sectors, the advisory described schemes in which employers contract with labor brokers who establish shell companies to receive payments, then distribute funds to workers in structured transactions designed to fall below Bank Secrecy Act reporting thresholds. The shell companies often operate as unlicensed money services businesses. 

FinCEN separately published updated guidance on real-time information-sharing Friday to allow institutions to coordinate more closely with one another in detecting and halting fraud before it spreads across the financial system. The bureau’s guidance clarifies that financial institution participating in the data-sharing program under Sec. 314(b) of the U.S. Patriot Act can exchange information on suspected fraud and other crimes beyond the program’s initial scope of money laundering and terrorism financing.

Bessent tied the guidance to the broader White House Task Force to Eliminate Fraud, which is led by Vice President JD Vance.

In his speech on Friday, Bessent was careful to draw a distinction between the role of banks and that of law enforcement, telling the assembled bankers that the advisory “does not ask banks to become immigration officers” but instead asks them to apply standard customer due diligence practices. He closed with a direct appeal to the Texas banking community to deepen their relationships with Treasury, FinCEN, and law enforcement, and to invest in compliance programs and employee training.

“When you see something and say something, you are serving the public by helping keep Americans safe,” Bessent said.