Risk and compliance are top of mind for financial institutions of all sizes — and for good reason. Keeping up with new regulatory requirements continues to be a challenge.
A recent example is the Consumer Financial Protection Bureau’s final version of 1071, the small business lending data collection rule. This new rule requires additional reporting on commercial and small business loan applications, similar to Home Mortgage Disclosure Act reporting.
Meanwhile, regulators are cracking down, particularly around fair lending. In 2022 alone, the CFPB levied approximately $3.7 billion in civil money penalties as a result of its enforcement actions. From operational and fraud risk to liquidity and market risk, financial institutions are also facing greater threats than ever before.
Adding to these challenges, third-party vendor management is also getting more scrutiny, in part because of the growing banking-as-a-service trend. In June, the Interagency Guidance on Third-Party Relationships was finalized (two years after it was initially proposed). This aligns vendor management requirements across the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Federal Reserve and replaces previous guidance.
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