On Friday, four federal banking regulators unveiled a proposed framework aimed at reshaping how banks and credit unions manage risks tied to third-party relationships. The Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the National Credit Union Administration said the proposed guidance is intended to help institutions "better align and tailor their third-party risk management practices to the risks of individual third-party relationships."
Officials described the proposal as principles-based and emphasized that, like other supervisory guidance, it is non-binding. The agencies signaled that after the proposal is finalized they plan to rescind existing third-party risk management guidance and replace it with the new, finalized document. The stated aims of that replacement are to promote greater consistency across the federal banking regulators and to support prudent innovation within the industry.
The agencies noted that stakeholders will have an opportunity to comment - written feedback is due within 60 days following publication of the proposal in the Federal Register. That comment period will inform the agencies before any final guidance is issued and before the existing guidance is withdrawn.
In a separate action, the federal bank regulatory agencies issued a statement focused on community banks and their engagement with core service providers. That statement outlines certain factors the agencies will consider when making supervisory and enforcement decisions that pertain to these core providers, reflecting targeted attention to how essential services are sourced and overseen by smaller institutions.
Additionally, the Federal Reserve Board released a request for comment on a proposed guide tailored specifically to Federal Reserve-supervised community banks. The Board said this companion document is intended to discuss the key risks faced by traditional community banking organizations in the context of their third-party relationships.
Together, the proposal, the agencies' statement on core providers, and the Fed's companion guide present a coordinated push to clarify supervisory expectations while allowing institutions to apply principles proportionally to the scale and complexity of individual third-party arrangements.