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Bank regulators seek comment on third-party risk management guidance

The agencies plan to rescind existing third-party risk management guidance and replace it with the finalized version to promote consistency.

Reported · Written up by our desk · Central Banks

Federal bank regulators, including the Federal Reserve Board and the FDIC, are seeking public comment on proposed guidance intended to help banks and credit unions manage risks tied to third-party relationships, such as vendors and other service providers.

The agencies said the proposed framework is principles-based and non-binding, and it is designed to help institutions better align and tailor third-party risk management practices to the risks of individual third parties, reflecting lessons from supervisory reviews.

The agencies also said that once the guidance is finalized, they plan to rescind existing third-party risk management guidance and replace it with the new version to promote consistency and “prudent innovation” in the banking industry.

Separately, regulators issued a statement on community banks’ engagement with core service providers, outlining factors they will consider in supervisory and enforcement decisions, and the Federal Reserve separately requested comment on a companion third-party risk management guide for Federal Reserve-supervised community banks.

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