The Financial Crimes Enforcement Network (FinCEN) has released an order which changes the Customer Due Diligence (CDD) requirements. The order was released in February.
According to the terms of the order, FinCEN is alleviating some of the requirements related to the verification of entities for beneficial owners of legal entities. Instead verifying identities will be limited to the following circumstances:
For the purposes of BSA compliance, a legal entity customer is defined as: “[a] corporation, limited liability company, or other entity that is created by the filing of a public document with a Secretary of State or similar office, a general partnership, and any similar entity formed under the laws of a foreign jurisdiction that opens an account.” Similarly, an account is defined as “a formal banking relationship established to provide or engage in services, dealings, or other financial transactions including a deposit account, a transaction or asset account, a credit account, or other extension of credit. Account also includes a relationship established to provide a safety deposit box or other safekeeping services, or cash management, custodian, and trust services.”
Now, for credit union purposes, this order is most applicable to business members and the potential services offered to them. This may include deposit accounts, loan accounts and other types of business accounts.
This recent order by FinCEN is supposed to modernize the BSA framework. According to a statement made by FinCEN Director Andrea Gacki, “[This] action reflects FinCEN’s commitment to modernizing the Bank Secrecy Act framework while maintaining strong safeguards against illicit finance. This relief supports a more efficient, risk-based approach to customer due diligence and reduces unnecessary regulatory burden without weakening the foundational requirements that protect the U.S. financial system.”
Both state-chartered and federally-chartered credit unions may want to review existing BSA policies and procedures. Additionally, the changes reflected in the order are the minimum standards. Credit unions may need to reflect heightened procedures if this order does not accurately reflect the credit unions risk parameters.
The order was released on February 13, 2026.
Have questions or want to know more? Email us at compliancesupport@viclarityus.com.
Provided by ViClarity.
For more information, email Heather Line.
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:
Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!
Additionally, other League-member compliance resources include:
Powered by ViClarity, a California’s Credit Unions and Nevada’s Credit Unions company.
