ABA Issues Staff Analysis on Proposed Third-Party Lending Guidance

ABA last week issued a members-only staff summary of the FDIC’s proposed guidance for third-party lending regarding safety and soundness and consumer compliance measure that FDIC-supervised institutions should follow when lending through a business relationship with a third party.

The proposed guidance covers strategic, operational, credit and compliance risks associated with third-party lending, and it details the basic elements of an effective third-party lending risk management program, including risk assessment, due diligence, contract structuring and oversight. It also covers supervisory considerations for third-party lending arrangements and outlines exam procedures.