US bank agencies propose replacing third-party risk guidance with principles-based framework

The Fed, FDIC, OCC and NCUA jointly proposed new third-party risk management guidance that would replace current standards when finalized. The package includes a companion guide for Federal Reserve-supervised community banks and a statement on supervisory treatment of core service provider relationships. This segment covers what the proposal changes, what stays non-binding, and the comment timeline firms need to track.

• Four agencies propose principles-based, non-binding third-party risk management guidance intended to replace existing guidance once finalized.
• Comments are due 60 days after Federal Register publication; the Fed added a companion guide for its supervised community banks.
• A separate joint statement addresses factors the agencies will consider on community banks' core service provider relationships.

Executive summary

The Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Administration and the Office of the Comptroller of the Currency jointly requested comment on proposed guidance to assist financial institutions with managing risks from third-party relationships. The…

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