US CDD Rule: Beneficial Ownership and FIN-2026-R001 Relief

The US customer due diligence rule, often called the CDD rule, makes banks and certain other financial institutions identify and verify the beneficial owners of their legal entity customers. In February 2026 FinCEN issued exceptive relief that changes when that work has to be repeated, and in May 2026 it published consolidated frequently asked questions that reflect the change. This guide explains the rule, the relief and what the FAQs say, using FinCEN's own pages and the National Credit Union Administration's examiner guide. It builds on our guide to the US customer identification program rule.

What the CDD rule requires

According to FinCEN, the CDD rule amends Bank Secrecy Act regulations and covers US banks, mutual funds, brokers or dealers in securities, futures commission merchants and introducing brokers in commodities. Covered institutions must identify and verify the beneficial owners of legal entity customers when they open accounts. FinCEN describes a beneficial owner as an individual who owns 25 percent or more of the entity, plus one individual who controls it. Institutions must keep written policies and procedures covering four areas: customer identification, beneficial owner identification, understanding customer relationships to build risk profiles, and ongoing monitoring for suspicious transactions with updates to customer information. The rule is in 31 CFR 1010.230.

The two prongs

The NCUA examiner guide says the ownership prong covers individuals who directly or indirectly own 25 percent or more of the entity's equity interests, and the control prong covers one individual with significant responsibility to control, manage or direct the entity, such as a chief executive, chief financial officer, managing member, general partner or treasurer. The same person can appear under both prongs. For each beneficial owner the institution must obtain at least a name, date of birth, address and identification number. FinCEN's consolidated FAQs say an entity therefore has between one and five beneficial owners.

The February 2026 exceptive relief

FinCEN's page lists a ruling titled Exceptive Relief from Requirement to Identify and Verify Beneficial Owners at Each Account Opening, reference FIN-2026-R001. The consolidated FAQs say it is dated 13 February 2026 and call it the Account Opening Exceptive Relief Order. Under the FAQs, institutions may, but need not, limit identification and verification of beneficial owners to three situations:

• when a customer first opens an account;
• when facts call the reliability of the existing information into question; and
• when risk-based ongoing customer due diligence requires it.

The FAQs add that opening a new account for an existing customer does not, by itself, trigger a new collection under this relief. The relief is optional, so an institution that prefers to collect at every account opening can keep doing so.

What the May 2026 FAQs say

According to FinCEN, the consolidated FAQs combine three earlier sets from July 2016, April 2018 and August 2020 into one document and update several answers to reflect the 2026 order, with many answers carrying a 6 May 2026 update date.

• New accounts and existing customers: a new account is one opened by a legal entity customer on or after 11 May 2018. Accounts opened before that date are not covered and no retroactive review is required. For an existing customer who is also a beneficial owner, the institution may rely on its current identification and verification records if the information is accurate and current and the customer confirms it, verbally or in writing.
• Certification form: the certification form in Appendix A is optional. Institutions may use their own forms or other methods that meet the substantive requirements, and they keep the form rather than filing it with FinCEN.
• Retention: identifying information is kept for five years after the account closes, and verification records for five years after they are made.
• Verification: at a minimum it must include the same elements used for individual customers under the customer identification program rules, though the procedures need not be identical. Photocopies of identity documents are permitted, and non-documentary methods such as contacting the beneficial owner or comparing information against other sources are acceptable. If a beneficial owner cannot appear in person, the institution may use a certification or equivalent information from the customer's representative, with a photocopy or non-documentary verification, provided it has no reason to doubt the information.
• Ongoing monitoring: routine periodic reviews are not, by themselves, a trigger for collecting or updating beneficial ownership information. Updates are triggered when normal monitoring reveals information relevant to the customer's risk profile, including a possible change in beneficial ownership. Changes to non-ownership details such as an address can be recorded without full re-certification if the information is accurate. If ownership has changed, the new owner's information must be collected, certified and verified. There is no fixed update schedule, and institutions may update periodically if they choose.

What examiners look at

The NCUA guide, written for credit union examiners, says examiners may sample legal entity accounts opened since the last examination and check whether the account was opened in line with the rule, the four data points were obtained for each beneficial owner, identity was verified within a reasonable time after opening, unverified cases were resolved appropriately, and records of the identity information, verification method and results were kept.

Our suggestions for updating your procedures

These are Learnsignal's suggestions, not FinCEN requirements. Decide in writing whether you will use the 2026 relief or keep collecting at each account opening, and record who approved that choice. If you use it, list the three situations that will trigger a fresh collection and train staff to spot them. Make sure monitoring staff know that an apparent ownership change is a trigger. Check your forms still capture the four data points. For the wider picture on ownership transparency, see our guide to ultimate beneficial ownership for accountants, and for training see Learnsignal CPD.

What we could not confirm

We read FinCEN's CDD rule page and its consolidated FAQs but not the text of the 2026 order itself, so we cannot state its precise conditions beyond what the FAQs describe. FinCEN's page does not give the ruling's date, which comes from the FAQs. The page lists exceptive relief in 2018 for premium finance refunds and automatic rollovers that we did not review. The NCUA guide covers credit unions, and we did not review the equivalent examiner guidance for other institution types. We did not review the entity exclusions and exemptions in 31 CFR 1010.230(e) and (h). We have not checked for changes after the May 2026 FAQs.

Frequently asked questions

Do institutions still have to collect beneficial ownership at every new account?

According to FinCEN's consolidated FAQs, institutions may, but need not, limit collection to three situations under the February 2026 relief, so collecting at every account opening remains permitted.

Is the certification form mandatory?

No. The FAQs say the Appendix A form is optional, and institutions may use their own forms or other methods that meet the substantive requirements.

How long must beneficial ownership records be kept?

The FAQs say identifying information is kept for five years after the account closes and verification records for five years after they are made.