Economy
Regulators propose tailored third-party risk guidance for banks
Four US agencies proposed principles-based third-party risk guidance and separately addressed community banks’ relationships with core service providers.
What happened
The Federal Deposit Insurance Corporation, Federal Reserve Board, National Credit Union Administration and Office of the Comptroller of the Currency requested public comment on proposed guidance for managing risks from third-party relationships. The principles-based guidance would help banks and credit unions tailor oversight to the risks of individual providers and is non-binding supervisory guidance. Comments are due 60 days after publication in the Federal Register. If finalized, the agencies plan to rescind existing guidance and replace it. They also issued a statement on community banks’ engagement with core service providers. Separately, the Federal Reserve sought comment on companion guidance for its supervised community banks.
Why it matters
The proposal would replace existing third-party risk guidance and promote a more tailored, consistent framework across banks and credit unions, while remaining non-binding during the comment process.
Source: U.S. Federal Reserve