John Zasada, Compliance Consulting Director, Financial Institutions Group

On July 13, 2021, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency issued proposed guidance related to the risk management of third-party relationships.

The 93-page proposed guidance aims to create uniformity by replacing each agency’s existing guidance with a more updated framework based on sound risk-management principles to address third-party relationship risks. Adoption of  risk management processes that are commensurate with the identified level of risk and complexity of the third-party relationships, along with the organizational structure of each financial institution, is recommended. The guidance outlines the third-party risk management life cycle and identifies principles applicable to each stage.

Stay tuned for more information once the guidance is formalized. In the meantime, should you have any questions on how this could potentially impact your financial institution, contact Doeren Mayhew’s regulatory compliance specialists.