US Regulators Extend Third-Party Risk Guidance Comment Period

Federal financial regulators announced an extension of the public comment period for proposed guidance on managing risks associated with third-party relationships, moving the deadline to December 16 from the original November 16 date, according to Fed_Press.

The extension was issued jointly by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency.

Supervisory Framework and Objectives

The proposed guidance incorporates supervisory experience and lessons learned from examining the third-party risk management practices of financial institutions. Regulators state the framework is designed to help banks and credit unions tailor risk management procedures to the specific risks of individual third-party relationships.

The regulatory framework adopts a principles-based approach and functions as non-binding supervisory guidance. Once finalized, the federal bank regulatory agencies intend to rescind existing third-party risk management guidance and replace it with the new framework to encourage consistency and prudent innovation across the banking sector.

Separate Community Bank Review

Additionally, the Federal Reserve Board announced a separate extension until December 16 for public comments on a proposed third-party risk management guide tailored specifically for traditional community banks supervised by the Federal Reserve.

The National Credit Union Administration also plans to rescind its current guidance and conduct independent reviews to update related materials as necessary.

Key facts

• Regulators extended the public comment period for proposed third-party risk management guidance to December 16.
• Comments were originally scheduled to close on November 16.
• Participating agencies include the Federal Reserve Board, FDIC, NCUA, and OCC.
• The Federal Reserve Board separately extended comments on a community bank-specific guide to December 16.