Third-Party Relationships: The OCC Gets Serious In Its New Bulletin

On October 30, 2013, the Office of the Comptroller of the Currency issued OCC Bulletin 2013-29 on Third-Party Relationships. The document rescinds OCC Bulletin 2001-47 and OCC Advisory Letter 2000-9, both of which had served as the basis for supplier management practices and inspections for many years. It is much more expansive than CFPB Bulletin 2012-03 (“Service Providers”), but the two should be read as complementary. With this new Bulletin, the OCC maintains the core elements of its guidance regarding the processes and risk-management principles by which banks contract with and supervise third parties, including merchant payment processing services, joint ventures, and services provided by affiliates or subsidiaries. However, the tone, level of prescription, and escalation of responsibility to the Board of Directors suggest a more active role by regulators.