U.S. banking agencies extend third-party risk guidance comment period to December 16
Federal banking and credit union regulators are giving institutions more time to respond to proposed guidance on managing risks tied to third-party relationships. The extension moves the deadline to December 16 from November 16 and keeps open a broader regulatory effort to align oversight of vendors and other outside partners.
Highlights
- U.S. banking agencies extended the comment period for proposed third-party risk management guidance from November 16 to December 16.
- The new proposed guidance is principles-based, non-binding, and aims to help institutions tailor risk management to individual third-party relationships.
- Once finalized, agencies plan to rescind existing guidance and implement this unified framework to promote consistency and prudent innovation in the banking sector.
Extended timeline for supervisory guidance
According to Federal Deposit Insurance Corporation, the Federal Reserve Board, the National Credit Union Administration, and the Office of the Comptroller of the Currency, the agencies are extending the comment period for their proposed third-party risk management guidance until December 16.The proposal draws on supervisory experience and lessons from examinations of financial institutions' third-party risk management practices. Regulators say it is designed to help banks and credit unions tailor risk management to the risks posed by individual third-party relationships, using a principles-based and non-binding supervisory framework.
Comments on the joint proposal were originally due on November 16. Separately, the Federal Reserve Board is also extending to December 16 the comment period on a proposed third-party risk management guide for Federal Reserve-supervised traditional community banks.
Industry implications and next steps
Once finalized, the federal bank regulatory agencies plan to rescind existing third-party risk management guidance and replace it with the new framework. The agencies say that approach is meant to promote greater consistency and prudent innovation across the banking industry.NCUA also plans to withdraw its current third-party risk management guidance and conduct its own reviews to update related guidance as needed. The planned changes indicate a wider push to streamline expectations for how regulated institutions oversee outside service providers and other business relationships.
As noted in our earlier article, the NCUA Deregulation Project finalized four rules trimming outdated requirements for U.S. credit unions.
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