Streamlining BOI verification with FinCEN exceptive relief
- FinCEN’s exceptive relief eliminates repetitive paperwork for repeat legal entity customers.
- Adopting the exceptive relief can support improved onboarding and customer experience.
- Financial institutions may rely on a risk-based approach in re-certifying beneficial ownership information (BOI).
On February 13, 2026, the Financial Crimes Enforcement Network (FinCEN) issued an order granting exceptive relief to covered financial institutions (FIN-2026-R001).
The order clarifies that beneficial ownership information (BOI) verification is only required in specified circumstances when a legal entity owner opens additional accounts after its initial account.
This effort is part of FinCEN’s commitment to modernizing the Bank Secrecy Act (BSA) framework. Exceptive relief helps make BSA compliance more efficient and reduces financial institutions’ regulatory burden while still maintaining strong safeguards to protect the U.S. financial system.
What is exceptive relief?
The 2016 Customer Due Diligence (CDD) Rule required covered financial institutions to re-certify beneficial ownership of a legal entity owner after initial certification for each new account opened. This process requires obtaining certification information either via the certification form or by some other means, provided the person opening the account certifies the information is accurate.
Under FinCEN’s 2026 exceptive relief, financial institutions are permitted to eliminate the routine recertification of BOI for subsequent accounts. However, they must still maintain a robust risk-based framework.
The new BOI reporting requirements
The exceptive relief states that financial institutions are only required to identify and verify beneficial ownership in the following circumstances:
- When a legal entity customer first opens an account with the institution.
- When the institution has knowledge of facts that reasonably call into question the reliability of previously obtained beneficial ownership information.
- As otherwise required based on the institution’s risk-based procedures for ongoing customer due diligence.
FinCEN stresses that this relief does not discourage covered financial institutions from exceeding minimum compliance requirements if they align with the institution’s risk profile and tolerance. Compliance with the exceptive relief order is within the discretion of the financial institution.
FinCEN anticipates pursuing further changes to the 2016 CDD Rule through the rulemaking process, and this exceptive relief notice will help inform those efforts.
How to implement exceptive relief
Financial institutions that comply with the exceptive relief order should consider:
- Updating written policies and procedures: Ensure written beneficial ownership policy and procedures are updated to reflect the exceptive relief guidance. This is critical because examiners and auditors will test against the written policy and procedures to ensure they match the institution’s actual practice.
- Implementing recertification protocols: If the covered financial institution chooses to rely on existing BOI for a new account, it must still ensure that the information is current. The 2026 order allows for a simplified “certification or confirmation,” meaning workflows should include documenting verification from the customer, either verbally or in writing, that the previous BOI on file is still accurate.
- Strengthening event-driven monitoring: Staff still need to recognize trigger events that necessitate a full BOI refresh, such as a change in the company’s physical address, a major shift in transaction patterns or news of a merger or acquisition.
- Training staff: Financial institutions should also ensure that applicable staff receive training on the updated guidance and the institution’s new procedures.,
How Wipfli can help
Navigating the complexities of the beneficial ownership rule and FinCEN’s latest exceptive relief requires a proactive approach. Wipfli provides your teams with the guidance and clarity they need to adapt.
Contact our financial services risk advisory team to talk about how you can build a more efficient compliance framework.
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