The Rollback and Its Implications
On August 14, 2026, the Financial Crimes Enforcement Network (FinCEN) ended beneficial ownership information (BOI) reporting requirements for U.S. companies under the Corporate Transparency Act. This marked the completion of a rollback that began with an interim rule in March 2025. If your company was formed in the United States, you're no longer required to file BOI reports with FinCEN.
However, the story doesn't end there. While the federal requirement has ended, other obligations remain. Financial institutions still collect BOI under the Customer Due Diligence Rule. Additionally, three jurisdictions maintain their own state-level requirements, and foreign-formed entities registered to do business in the U.S. still file with FinCEN under a narrowed scope.
This isn't a compliance failure in the traditional sense. It's a regulatory shift that can cause confusion because the same term now applies to different obligations under different authorities.
Key Dates to Remember
- January 1, 2026: New York's LLC Transparency Act requires foreign-formed LLCs authorized to do business in New York to disclose beneficial ownership.
- March 2025: FinCEN issues an interim rule beginning the rollback of federal BOI reporting.
- August 14, 2026: FinCEN's final rule takes effect, ending BOI reporting for U.S. companies and U.S. persons.
- December 2025: New York Governor vetoes a bill that would have restored broader state-level reporting requirements.
- February 10, 2027: Cutoff date for FinCEN's planned deletion of previously filed BOI data.
- January 1, 2027: Deadline for foreign-formed LLCs authorized in New York before January 1, 2026, to file their initial beneficial ownership disclosure.
Understanding the Different Requirements
This isn't about control failures but understanding how three separate beneficial ownership regimes operate under similar names but different authorities:
- Federal FinCEN reporting has ended for U.S. entities but continues for foreign reporting companies registered in U.S. states.
- Financial institution CDD requirements remain unchanged. Banks must still collect beneficial ownership information from legal entity customers under FinCEN's Customer Due Diligence Rule.
- State-level requirements continue in New York, the District of Columbia, and South Dakota, each with its own criteria and penalties.
The confusion often arises from overlapping terminology. When your bank requests beneficial ownership information, it's fulfilling its CDD obligations, not enforcing a federal requirement.
What You Need to Know
- FinCEN's Customer Due Diligence Rule requires financial institutions to identify and verify beneficial owners of legal entity customers. This responsibility lies with the bank, but you'll need to provide the information when opening accounts.
- New York's LLC Transparency Act applies to LLCs formed under foreign law and authorized to do business in New York. Covered entities file through the New York Department of State and owe annual confirmations. Penalties can reach $500 per day.
- District of Columbia's beneficial ownership requirement operates independently of federal definitions. Entities report through registration filings and biennial reports, with a lower threshold for disclosure.
- South Dakota Statute § 59-11-24 requires entities owning agricultural land to disclose foreign beneficial owners.
For foreign reporting companies still filing with FinCEN, the scope has narrowed significantly. Initial reports are due within 30 calendar days of registration notice, and updates or corrections are due within 30 days.
Action Items for Your Team
- Map your entity structure by formation jurisdiction. The federal relief applies only to U.S.-formed entities. Foreign-formed entities registered in U.S. states remain reporting companies under the narrowed federal rule.
- Don't confuse bank requests with federal filing obligations. Train your team to recognize that these are separate regimes.
- Check state obligations in New York, D.C., and South Dakota. Ensure compliance with state-specific requirements.
- Monitor emerging state requirements. Stay informed about potential new state-level rules.
- Don't request deletion of previously filed information. FinCEN will handle this automatically.
- Verify exemption status for foreign entities. Confirm your status rather than assume it.
- Update your compliance calendar. Remove U.S. entity BOI deadlines and add relevant state-level deadlines.
The real risk isn't missing a federal filing that no longer exists. It's assuming all BOI obligations have ended when multiple regimes remain in force, each with different scopes and penalties.
