Regulatory Alerts2024-05-03 | FIL-19-2024Third-Party Risk Management: A Guide for Community Banks
The Federal Reserve, FDIC, and OCC issued this guide to require community banks to systematically identify, assess, monitor, and control risks across the entire third-party relationship life cycle. The agencies mandate that banks retain ultimate responsibility for safe and sound operations and regulatory compliance regardless of outsourcing, while applying risk-based oversight commensurate with their size, complexity, and risk profile. The document outlines practical considerations for planning, due diligence, contract negotiation, ongoing monitoring, and termination to ensure effective governance and independent reviews.
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