- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-06-08T13:50:00
U.S. banking regulators on Tuesday combined to issue final guidance on managing the risks of third-party relationships that replaces the previous documentation each agency released individually.
The Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), and Treasury Department’s Office of the Comptroller of the Currency (OCC) cited their desire for promoting consistency and clearly articulating risk-based principles for third-party risk management in publishing the 68-page document. The guidance supersedes previous iterations put forward by the Fed in 2013, FDIC in 2008, and OCC in 2013.
The guidance, which is directed at all supervised banks, “states that sound third-party risk management takes into account the level of risk, complexity, and size of the banking organization and the nature of the third-party relationship.” The agencies cited an increase in the number and type of banks’ third-party relationships, including with financial technology (fintech) partners, as a driver behind the new documentation.
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The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency combined to provide guidance on third-party risk management focused on the unique risks faced by community banks in their third-party relationships.
The impact of new technologies like generative artificial intelligence on the third-party risk management landscape was among the points of discussion addressed at Compliance Week’s TPRM Summit in Atlanta.
As financial institutions mull potential growth opportunities with digital asset and artificial intelligence tools, Acting Comptroller of the Currency Michael Hsu warned against leaving risk and compliance teams out of the loop.
Financial institutions holding Russian sovereign assets that have not reported them to the Treasury Department’s Office of Foreign Assets Control are now required to do so by Aug. 2.
Compliance officers should take note of proposed laws in the U.K. with the newly elected Labor government setting the legislative agenda in the King’s Speech last week, promising consultations on enhanced employee rights and a higher minimum wage.
Four federal banking regulators have joined the Treasury Department’s Financial Crimes Enforcement Network in issuing a notice of proposed rulemaking that would require financial institutions to conduct more thorough risk assessments on their anti-money laundering/countering the financing of terrorism programs.
