Federal Banking Agencies Issue Proposed Guidance on Third-Party Risk Management: Five Things To Know

Federal Banking Agencies Issue Proposed Guidance on Third-Party Risk Management: Five Things To Know

July 15, 2021, Covington Alert

On Tuesday, July 13, 2021, the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Office of the Comptroller of the Currency (“OCC”), and the Federal Deposit Insurance Corporation ("FDIC" and, collectively, the “Agencies”) invited public comment on proposed interagency guidance on managing risks associated with third-party relationships (the “Proposed Guidance”). By harmonizing for the first time the Agencies’ supervisory expectations and guidance on third-party risk management, which has become a significant supervisory priority in recent years, the Proposed Guidance would promote consistency in how the Agencies will assess banking organizations’ third-party risk management.

The Proposed Guidance would apply to all banking organizations supervised by the Agencies (“banking organizations”), and would be based upon the OCC’s 2013 guidance in this area (“OCC Guidance”) subject to a number of changes; a chart highlighting key differences between the Proposed Guidance and the 2013 OCC Guidance is included as an Appendix to this alert. Comments on the Proposed Guidance are due 60 days after publication in the Federal Register.