On May 3, 2024, the Federal Reserve, the FDIC, and the OCC jointly issued a guide to assist community banks in developing and implementing third-party risk management practices. The guide was issued as a resource for community banks and does not substitute the Interagency Guidance on Third-Party Relationships: Risk Management (TPRM Guidance) that the agencies issued in June 2023.
As community banks are increasingly engaging with third parties to compete in and respond to an evolving financial services landscape, direct operational control over activities is also being limited and may introduce new risks or increase existing risks to the bank. The guide provides potential considerations, resources, and examples through each stage of the third-party risk-management life cycle and is organized under the following topics:
Risk Management - discussion on risk considerations.
Third-Party Relationship Life Cycle - the five stages of the life cycle are explained.
Governance - considerations for governance related to third-party risk.
Appendix - additional resources that can help support a bank’s development and implementation of its third-party risk-management practices.
Read the OCC’s press release here.
The Guide can be found here.