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ARTICLE · 01 OCTOBER 2026

From Process To Principles: Federal Regulators Propose A New Third-Party Risk Management Framework

Crowell & Moring LLP
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Federal banking regulators propose replacing the 2023 Third-Party Risk Management Guidance with a principles-based framework that scales oversight to actual risk magnitude and likelihood rather than prescriptive process requirements. The proposal eliminates mandatory contract terms, reduces inventory requirements for lower-risk relationships, and explicitly permits banks to accept third-party risk within their stated risk appetite without supervisory criticism.

United StatesFinance and Banking
Cristina Diaz
Cristina Diaz
Scott Lessne
Scott Lessne
Carlton Greene
Carlton Greene

On September 11, 2026, the OCC, FDIC, Federal Reserve, and NCUA proposed to replace the 2023 Interagency Guidance on Third-Party Relationships with a shorter, principles-based document.1 Two companion releases complete the package: a final interagency statement on the supervision of the use of core service providers by community banks, effective on issuance,2 and a proposed Federal Reserve guide for traditional community banks (the Community Bank Guide).3 Comments are due November 16, 2026.4

The scale of the change is hard to overstate. The 2023 guidance is the framework every banking organization’s vendor program is built to,5 and it has been the standard behind a series of public enforcement actions brought against banks in fintech partnerships since 2024.6 The agencies now propose not to amend the 2023 guidance, but rather to rescind it, together with three related documents.7 The plan is to replace the 2023 guidance with a document the agencies say establishes no enforceable

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