Regulatory stakes are rising at a pace that exceeds many financial institutions’ ability to respond. Similar to FACTA, Anti-Money Laundering and other “Know Your Customer” guidance, regulators expect institutions to know their third parties. Since October 2013, the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Consumer Financial Protection Bureau (CFPB) and the Federal Financial Institutions Examination Council (FFIEC) have issued new guidance for the management of third party risk. Now within the scope of virtually every regulatory exam are scope, consistency, and execution rigor of processes that proactively identify, assess, manage and control third party risk. The responsibilities of the board of directors and executive management have expanded accordingly.
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