Federal banking and financial regulators are seeking public comment on proposed guidance to assist financial institutions with managing risks associated with third-party relationships.
The guidance – jointly proposed by the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC) – is designed to help banks and credit unions to better align and tailor their third-party risk management practices to the risks of individual third-party relationships.
Overall, the proposed guidance focuses on a principles-based approach.
When finalized, the federal bank regulatory agencies plan to rescind existing third-party risk management guidance and replace it with the finalized guidance. The agencies said this will be done to promote consistency and prudent innovation in the banking industry.
Comments on the proposed guidance are due 60 days after publication in the Federal Register.
The Federal Reserve Board separately requested comment on a proposed third-party risk management guide specifically for Federal Reserve-supervised community banks. This is intended to serve as a companion document to the proposed guidance.
Also, the federal bank regulators plan to issue a statement on community banks’ engagement with core service providers. The statement will discuss certain factors the agencies will consider in making supervisory and enforcement decisions related to these core providers.