Federal banking regulators issue TPRM guidance for community banks

Three federal banking regulators combined to provide guidance on third-party risk management (TPRM) focused on the unique risks faced by community banks in their third-party relationships.

The Federal Deposit Insurance Corporation, Federal Reserve Board, and Treasury Department’s Office of the Comptroller of the Currency issued the guidance Friday.

“Third-party relationships can offer community banks access to new technologies, risk management tools, human capital, delivery channels, products, services, and markets,” the guidance stated. “A community bank’s reliance on third parties, however, reduces its direct operational control over activities and may introduce new risks or increase existing risks, including, but not limited to, operational, compliance, financial, and strategic risks.”