Agencies – Request comment on proposed risk management guidance for third-party relationships

July 13, 2021 – Offers a framework of principles to consider in developing risk management practices. Aims to assist banks with identifying and addressing related risks, as well as responding to industry feedback requesting alignment among agencies regarding 3rd-party risk management guidance.

3rd Party Relationships Guidance
Framework proposal based on sound risk management principles for banks to consider. Related to developing risk management practices throughout the life cycle of relationships. Including planning to manage relationships, risks, due diligence, third-party selection, contract negotiation, oversight, accountability, ongoing monitoring, and termination. Level of risk, complexity, bank size, nature of 3rd-party relationship taken into account. Promoted compliance with applicable laws, regulations, including consumer protection. Proposed guidance further discussed supervisory reviews of third-party relationships. Advised banks responsible for safety, soundness, compliance of outsourced activities.

Effectiveness
Comments must be submitted in 60 days from pending publication in Federal Register.

For more information, visit www.federalreserve.gov.

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