On 7/13/21, the joint agencies (Federal Reserve, FDIC, & OCC) announced a request for public comment on proposed guidance designed to help banking organizations manage risks associated with third-party relationships, including relationships with financial technology-focused entities. The proposed guidance is intended to assist banking organizations in identifying and addressing the risks associated with third-party relationships and responds to industry feedback requesting alignment among the agencies with respect to third-party risk management guidance. Comments must be received within 60 days of the proposed guidance's publication in the Federal Register.
As part of their release, the Federal Reserve released the following executive summary:
“Each of the agencies has previously issued guidance for its respective supervised banking organizations addressing third-party relationships and appropriate risk management practices. However, each agency did so independently and at different times, and the existing guidance is therefore not consistent among agencies.
To modernize and promote consistency in third-party risk management guidance, the proposed guidance is based on the OCC’s existing third-party risk management guidance from 2013. It would offer a framework based on sound risk management principles for banking organizations to consider in developing risk management practices for third-party relationships.
The proposed guidance recognizes differences in the nature, level of risk, and complexity of banking organizations and their third-party relationships. The proposal includes a number of questions to encourage broad public comment on utility, relevance, comprehensiveness, and clarity of the guidance for banking organizations with different risk profiles and organizational structures.”
Comments are due by September 17, 2021.
The Federal Register publication of the proposal can be found here.
The Federal Reserve’s Memo and Executive Summary can be found here.
The joint proposal can be found here.