Agencies Release Third-Party Risk Management Guide for Community Banks

Posted: May 08 2024

The Federal Reserve, FDIC and OCC have released a new guide to help community banks develop and manage third-party risk management practices. Among other things, the guide states that engaging a third party does not diminish or remove a bank’s responsibility to operate in a safe and sound manner, or to comply with legal and regulatory requirements, just as if the bank were to perform the service or activity itself.
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“A community bank may engage an external party to conduct aspects of its third-party risk management,” the guide states. “However, the bank cannot abrogate its responsibility to employ effective risk-management practices, including when using a third party to conduct third-party risk management on behalf of the bank.”
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The guide provides potential considerations, resources and examples through each stage of the third-party risk-management life cycle. It is not a checklist and does not prescribe specific risk-management practices or establish any safe harbors for compliance with laws or regulations, the agencies said. It also is not a substitute for the existing interagency guidance on third-party relationship risk management.

Download the guide, visit: https://www.federalreserve.gov/publications/files/third-party-risk-management-guide-20240503.pdf

To view the guidance, visit: https://www.occ.gov/news-issuances/bulletins/2023/bulletin-2023-17.html