Key facts
- Federal Reserve, FDIC, and OCC removed references to reputation risk from guidance.
- Updated guidance focuses on third-party relationships for financial institutions.
- The changes aim to streamline regulations and reduce burdens on banks.
The Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) have jointly issued updated guidance concerning third-party relationships for financial institutions. A key change in this revised guidance is the removal of additional references to reputation risk. This move is intended to streamline regulatory expectations and reduce compliance burdens for banks when managing relationships with external vendors and service providers. The updated framework aims to provide clearer direction while maintaining safety and soundness in the financial system.