FinCEN Issues Significant Relief on Customer Due Diligence Rule

02/18/26

The Financial Crimes Enforcement Network (FinCEN) last week issued targeted regulatory relief under the Bank Secrecy Act by easing customer due diligence (CDD) requirements for banks - a welcome step toward a more practical, risk-based compliance framework. Under the new ruling, banks are no longer required to repeatedly collect and verify beneficial ownership information each time an existing legal entity customer opens a new account. Instead, verification is required only at the start of a customer relationship or when risk-based monitoring indicates ownership information may have changed.

The change eliminates duplicative paperwork that has long created operational burden without improving risk management, allowing banks to focus compliance resources on higher-risk activity while improving the customer experience for business clients. At the same time, FinCEN launched a new whistleblower portal aimed at strengthening enforcement against bad actors, signaling a broader regulatory shift toward smarter oversight rather than additional procedural requirements. For OBL members, this action represents a meaningful acknowledgment by regulators that effective AML compliance should be risk-focused, efficient, and aligned with how relationship banking actually works.