U.S. Regulators Release Proposed Guidance on Bank Third-Party Risk Management

PANews, September 11 news, according to Bloomberg, U.S. regulators issued a statement on Friday announcing the publication of a proposed guidance on bank third-party risk management. The Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration stated that the proposal aims to help banks and credit unions "better align and tailor their third-party risk management practices to match the risks of each third-party relationship."

Federal Reserve staff said in a memo that the plan comes as banks are increasingly outsourcing some functions and relying on third-party relationships to improve efficiency and reduce costs. The plan will be subject to public comment, is non-binding, and aims to focus agency oversight of such risks on a principles-based approach. Federal Reserve Governor Barr opposed the proposal, citing concerns over the "significant financial risk" standard.