The Federal Reserve, FDIC, and OCC have released final interagency guidance for their respective supervised banking organizations on managing risks associated with third-party relationships, including relationships with financial technology-focused entities such as bank/fintech sponsorship arrangements. The guidance is intended to provide principles for effective third-party risk management for all types of third-party relationships, regardless of how they may be structured. At the same time, the agencies state that banking organizations have flexibility in their approach to assessing the risks posed by each third- party relationship and deciding the relevance of the considerations discussed in the final guidance
The final guidance rescinds and replaces each agency’s previously-issued guidance on risk management practices for third-party relationships. In their July 2021 proposal, the agencies had included as an appendix FAQs issued by the OCC to supplement the OCC’s existing 2013 third-party risk management guidance. The proposed guidance included the revised FAQs as an exhibit and the agencies sought comment on the extent to which the concepts discussed in the FAQs should be incorporated into the final guidance. In their discussion of the final guidance, the agencies identify which concepts from the FAQs have been incorporated into the final guidance.