OCC Proposes Lighter Third-Party Rules for US Community Banks
TLDR:OCC proposal shifts third-party oversight from blanket rules to risk-based bank standards.Comptroller Jonathan Gould says the plan cuts regulatory friction for community banks nationwide.New guidance clarifies exactly how the OCC supervises core service providers used by small banks.Banks gain more flexibility to tailor vendor risk management to their size and complexity. The Office of the Comptroller of the Currency moved to ease compliance pressure on community banks this week. The agency proposed new guidance on third-party risk management. Besides, the plan ties oversight requirements to actual risk rather than broad process rules. Regulators say the change gives smaller lenders room to grow. OCC Proposal Targets Third-Party Risk Management The OCC published the proposal on its website, framing it as part of a broader push to cut regulatory friction. Under the plan, banks would size their oversight of vendors to the harm a given relationship could actually cause. A banks own scale, complexity, and risk profile would shape how much scrutiny each vendor relationship gets. The current approach, the agency said, leans on rigid, process-heavy checklists that treat every vendor the same way. That model forces small banks to spend resources on low-risk contracts the same way they do on high-risk ones. The new guidance would drop
