Ongoing Customer Due Diligence
FinCEN's February 2026 order slashes redundant beneficial ownership checks for banks opening multiple accounts with the same legal entity customers, easing compliance costs amid broader deregulation push.
Key takeaways
- •On February 13, 2026, FinCEN granted exceptive relief eliminating the need for financial institutions to re-identify and verify beneficial owners every time an existing legal entity customer opens a new account, limiting it to first accounts, reliability concerns, or risk-based triggers.
- •This change reduces duplicative burdens tied to the 2016 CDD Rule while preserving ongoing monitoring for suspicious activity and updates to customer information, aligning with Corporate Transparency Act adjustments after narrowing BOI reporting mainly to foreign entities.
- •The relief reflects Trump administration priorities to cut regulatory costs, but institutions must still adapt policies to avoid compliance gaps in AML frameworks.
Deregulation in AML Compliance
Financial institutions in the United States face a significant shift in anti-money laundering requirements following FinCEN's February 13, 2026, issuance of exceptive relief under the Bank Secrecy Act. The order removes the obligation—rooted in the 2016 Customer Due Diligence Rule—to collect and verify beneficial ownership information for legal entity customers at every new account opening. Instead, this applies only when a legal entity opens its first account with the institution, when facts question prior information's reliability, or as dictated by the institution's risk-based ongoing due diligence procedures.
This adjustment stems from long-standing industry complaints about redundancy, especially since beneficial ownership rarely changes between accounts for the same customer. It aligns with obligations under the Corporate Transparency Act, which mandated reducing duplicative burdens after FinCEN narrowed BOI reporting in 2025 to primarily foreign entities, exempting most U.S. companies.
The real-world impact hits banks, credit unions, brokers, and other covered institutions hardest burdened by repetitive collections. Relief promises lower operational costs—potentially significant for those handling high volumes of business accounts—without dismantling core protections against illicit finance. Ongoing monitoring remains mandatory, requiring institutions to watch for suspicious transactions and update information on a risk basis.
A key tension lies in the balance: deregulation supporters hail it as efficiency-boosting and economy-friendly, but critics worry it could weaken visibility into ownership changes or exploitation risks if monitoring proves inconsistent. The order took immediate effect, prompting urgent policy reviews, and signals more formal CDD Rule amendments ahead.
Broader context includes parallel shifts, such as delayed AML program deadlines for investment advisers to 2028 and EU AML package developments emphasizing risk-based CDD harmonization, but the U.S. move stands out as immediate burden reduction.
Sources
- https://www.fincen.gov/news/news-releases/fincen-issues-exceptive-relief-streamline-customer-due-diligence-requirements
- https://www.davispolk.com/insights/client-update/fincen-streamlines-cdd-requirements-reducing-compliance-burden-covered
- https://www.eversheds-sutherland.com/en/united-states/insights/finc-en-continues-deregulatory-efforts-with-exceptive-relief-for-customer-due-diligence-rule
- https://www.fincen.gov/resources/statutes-and-regulations/cdd-final-rule
- https://ncua.gov/newsroom/press-release/2026/fincen-issues-exceptive-relief-bank-secrecy-act-requirement-credit-unions