Author: Nicholas P. Milcarek, CFE, CAMS
On February 13, 2026, FinCEN issued an order enabling “exceptive relief” to all covered financial institutions specifically under the 2016 CDD rule. Before the order, covered institutions were required to identify Beneficial Owners “at the time a new account is opened” with “new account” being identified as every account being opened at the institution regardless of longevity of the customer relationship. The order now only requires beneficial ownership information to be obtained/updated, “(1) when a legal entity customer first opens an account with a covered financial institution; (2) any time thereafter when the covered financial institution has knowledge of facts that would reasonably call into question the reliability of beneficial ownership information previously obtained about the legal entity customer; and (3) as needed based on a covered financial institution’s risk-based procedures for conducting ongoing customer due diligence.” Potential triggering events include death of an owner, purchase of the entity by an external party, potentially higher risk customer reviews, etc.
What does this mean for your financial institution? Now beneficial ownership requirements will more closely follow the CIP rules and will allow FIs to obtain Beneficial Ownership certificates and identification at initial account opening while subsequent account openings for the same entity will generally only need an updated Beneficial Ownership certification if triggering events happen (see 2 and 3 above).
Your FI will need to determine based on your risk profile if this exceptive relief should be implemented, as this change is not required and is within the FIs discretion. If changes are made, your Board approved policies and procedures will need to be updated and training for applicable staff will need to take place. If an FI implements the exceptive relief, it may be a good idea to document discussions with the customer about any possible Beneficial Ownership change when additional accounts are opened for the same entity.
Financial institutions must continue to maintain adequate risk-based processes and procedures for complying with Beneficial Ownership requirements. Obtaining and documenting Beneficial Ownership information during the initial account opening process as well as for triggering events on an established relationship are still key aspects for remaining in compliance.
Reference for the FinCEN order and news release can be found below:
Order: https://www.fincen.gov/system/files/2026-02/FinCEN-Order-CCDExceptiveRelief.pdf
News Release: https://www.fincen.gov/news/news-releases/fincen-issues-exceptive-relief-streamline-customer-due-diligence-requirements
On February 13, 2026, FinCEN issued an order enabling “exceptive relief” to all covered financial institutions specifically under the 2016 CDD rule. Before the order, covered institutions were required to identify Beneficial Owners “at the time a new account is opened” with “new account” being identified as every account being opened at the institution regardless of longevity of the customer relationship. The order now only requires beneficial ownership information to be obtained/updated, “(1) when a legal entity customer first opens an account with a covered financial institution; (2) any time thereafter when the covered financial institution has knowledge of facts that would reasonably call into question the reliability of beneficial ownership information previously obtained about the legal entity customer; and (3) as needed based on a covered financial institution’s risk-based procedures for conducting ongoing customer due diligence.” Potential triggering events include death of an owner, purchase of the entity by an external party, potentially higher risk customer reviews, etc.
What does this mean for your financial institution? Now beneficial ownership requirements will more closely follow the CIP rules and will allow FIs to obtain Beneficial Ownership certificates and identification at initial account opening while subsequent account openings for the same entity will generally only need an updated Beneficial Ownership certification if triggering events happen (see 2 and 3 above).
Your FI will need to determine based on your risk profile if this exceptive relief should be implemented, as this change is not required and is within the FIs discretion. If changes are made, your Board approved policies and procedures will need to be updated and training for applicable staff will need to take place. If an FI implements the exceptive relief, it may be a good idea to document discussions with the customer about any possible Beneficial Ownership change when additional accounts are opened for the same entity.
Financial institutions must continue to maintain adequate risk-based processes and procedures for complying with Beneficial Ownership requirements. Obtaining and documenting Beneficial Ownership information during the initial account opening process as well as for triggering events on an established relationship are still key aspects for remaining in compliance.
Reference for the FinCEN order and news release can be found below:
Order: https://www.fincen.gov/system/files/2026-02/FinCEN-Order-CCDExceptiveRelief.pdf
News Release: https://www.fincen.gov/news/news-releases/fincen-issues-exceptive-relief-streamline-customer-due-diligence-requirements
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