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| Agencies propose New Guidance for managing Third-Party Risk |
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NCUA and other federal financial regulators Friday proposed new guidance to assist financial institutions with managing risks associated with third-party relationships.
The proposed guidance:
• Would allow credit unions to adjust due diligence and monitoring based on the actual risk of a vendor relationship, with less review expected for lower-risk vendors;
• Recognizes that credit unions may have limited leverage with large vendors and may accept some remaining risk;
• Focuses on the actual risks of a vendor relationship rather than a one-size-fits-all checklist, and doesn’t require the same contract terms in every case; and
• Makes clear the guidance is non-enforceable, and that non-compliance will not result in supervisory action.
When finalized, the regulatory agencies plan to rescind existing third-party risk management guidance and replace it with the finalized guidance.
America’s Credit Unions opposes granting the NCUA board authority over credit union third-party vendors, which is not part of this proposal. Following a full analysis of the proposal, America’s Credit Unions will issue a Regulatory Comment alert to solicit member feedback and submit comments.
Comments are due 60 days after publication in the Federal Register.
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