The federal banking regulators released a guide for community banks on managing risk in third-party relationships.
Details: The 23-page guide:
Focuses on third-party relationships related to technology, risk management, human capital, and more.
Includes sections on planning, due diligence, and contracts as well as an appendix that lists government resources.
Says third-party relationships present varied risks that community banks are expected to appropriately identify, assess, monitor, and control.
Background: The guide follows the release last summer of final interagency guidance on managing risk in third-party relationships. That guidance signaled the release of additional resources on third-party risks for community banks.
ICBA View:
Following the release of the interagency guidance last year, ICBA commended Federal Reserve Governor Michelle Bowman for not supporting the guidance because it did not provide the necessary clarity or supplemental tools to facilitate community bank implementation.
In a 2021 comment letter, ICBA advocated consolidating third-party risk management guidance, more fully recognizing the potential benefits of community bank-fintech partnerships, and structuring the guidance so it can be further tailored.
