Federal banking regulators are proposing a new approach to how banks and credit unions oversee the technology companies, payment processors and other outside businesses they rely on to provide financial services. The Federal Reserve Board, Federal Deposit Insurance Corporation, National Credit Union Administration and Office of the Comptroller of the Currency jointly announced the proposed third-party risk management guidance on September 11. The proposal would replace existing federal guidance and encourage financial institutions to focus their oversight on the actual risks posed by individual third-party relationships rather than treating every vendor the same way.
For consumers, the proposal doesn’t create new requirements for managing a bank account or change federal deposit insurance. Instead, it addresses what happens behind the scenes when a financial institution relies on another company to help deliver its products and services.
