Permanent Relief from Beneficial Ownership Rule for Certain Transactions

FinCEN issued a ruling (FIN-2018-R003) granting permanent exceptive relief from Beneficial Ownership requirements for legal entity customers for certain account rollovers, renewals, modifications and extensions. The permanent relief broadens the scope of relief provided by the temporary ruling, but maintains strict definitional limits on which accounts are affected.  Financial institutions will continue to be required to identify and verify the identity of beneficial owners of legal entity customers at the initial account opening of all accounts (including those affected by the exceptive relief) occurring on or after May 11, 2018.  The exceptive relief applies to:

  • A rollover of a certificate of deposit that does not allow additional deposits during its term;
  • A renewal, modification, or extension of a loan (e.g., setting a later payoff date) that does not require underwriting review and approval;
  • A renewal, modification, or extension of a commercial line of credit or credit card account (e.g., a later payoff date is set) that does not require underwriting review and approval; and
  • A renewal of a safe deposit box rental.