Agencies extend comment period for proposed third-party risk management guidance

The Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency jointly announced an extension of the comment period for proposed third-party risk management guidance. The original deadline of November 16 has been pushed to December 16 to allow stakeholders more time to review and respond to the proposal. The agencies emphasized that the guidance reflects supervisory experience and lessons learned from examinations of financial institutions' third-party risk management practices.

The proposed guidance aims to help banks and credit unions tailor their risk management practices to the specific risks posed by individual third-party relationships. It adopts a principles-based approach, consistent with the agencies' supervisory framework, and remains non-binding even after finalization. The proposal seeks to replace existing third-party risk management guidance to promote consistency across the banking industry.

The Federal Reserve Board separately extended the comment period for a proposed third-party risk management guide specifically for traditional community banks it supervises. This extension also runs until December 16, aligning with the broader interagency effort. The Federal Reserve noted the proposal is designed to address risks unique to community banks' engagement with core service providers.

The agencies are seeking public comment on the proposed guidance to inform their final decisions. The Federal Reserve Board also issued a statement on community bank engagement with core service providers, signaling its focus on ensuring appropriate risk management in these relationships. The comment period extensions apply to both the interagency proposal and the Federal Reserve's community bank-specific guide.